Dr. Yan Liang, an economics professor at Willamette University, speaks to CGTN Europe about the significance of China President Xi Jinping's visit to Southeast Asia.
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00:00Yan Yang is a professor of economics at Willamette University.
00:03Professor, welcome.
00:04How is this visit expected to improve trade between Cambodia and China?
00:10Yeah, good to talk to you, Jamie.
00:12So I think this is a very significant trip,
00:15as we know that China has been Cambodia's largest trade partner.
00:18Last year, the two-way trade reached $15 billion,
00:22but of course, with a very significant trade surplus on China's side.
00:26So as you just reported, and you talked about,
00:28that Cambodia is now in a very tricky position,
00:32as many of the Southeast Asian countries,
00:34where there's a 49% of tariff rate earlier was imposed by the United States.
00:38Now, of course, it's with a 90-day pause, but pause is a pause,
00:42so the future is still very uncertain.
00:43So I think this trip is really going to help to strengthen
00:47the trade relationships between these two countries.
00:50So I think China will continue to export some of the very essential machineries,
00:54raw materials for the industrialization for Cambodia.
00:58But at the same time, I think China will open up the markets more
01:01to import from Cambodia, you know, when it comes to agricultural products,
01:05jewelries, and many other products, I think, are in the plan.
01:10And also more cooperation on infrastructure,
01:12which I think are also very essential for Cambodia's economic development.
01:16You describe Cambodia as in a rather tricky position.
01:20That's something of an understatement, perhaps, in the middle of a global trade war.
01:25What about the timing of this visit?
01:28What should we make of it?
01:29Right, so I think you're absolutely right.
01:34It is an understatement.
01:35It's such uncertain, volatile times, and we know that many of the countries
01:39do rely on the integration into the global market, you know,
01:42being very small-sized, very resources-constrained domestically.
01:46But, of course, Trump is, you know, adamant in imposing tariffs
01:50and waging this trade war.
01:52So I think countries would have to find alternatives.
01:55On the one hand, you know, smaller countries may have to negotiate
01:58with the United States, which I think this is why China is saying,
02:02you know, we are working together with you.
02:04We want to have a collective response to enhance our bargaining power.
02:08And I think the ASEAN countries can definitely do a better job on that.
02:12On the other hand, I think China is also trying to forge
02:15this sort of regional integration in a more forceful manner, right,
02:21because China and other countries, South Korea and Japan,
02:25and also ASEAN countries have already panned the RCEP.
02:28And so the next step is really to improve the regional trade integration.
02:33So I think this would really help countries like Cambodia
02:36to diversify their export, you know, destinations
02:39and also improve their trade competitiveness.
02:44Diversifying is one thing, but many countries, for obvious reasons,
02:48will be considering pivoting away from exporting to the United States
02:53given these punitive tariffs.
02:56Do you think that's likely to be a temporary pivot,
03:00or will it be a permanent pivot away from U.S. markets?
03:05I think that's a great question.
03:09I think what these countries are, you know, sort of thinking about
03:13is that even this tariff is, you know, going from temporary to permanent,
03:18you know, there's still so much uncertainty, right?
03:21So even if this tariff troops, right, may be extended in the future,
03:25but I think that really creates a lot of uncertainty.
03:29And also the U.S. is essentially undermining, you know,
03:31its own credibility as a trade partner in this sort of so-called rule-based trading system.
03:36So I think either way, even if Trump tomorrow says,
03:40we are going to extend that the pause, we're going to make it permanent.
03:43Now, you know, Cambodia is going to only have 10% of tariff.
03:47I think that was still not going to ease the doubt and anxiety of the countries
03:52because we know that Donald Trump, you know, is being unpredictable.
03:55And, you know, so I think either way, countries will continue to diversify
04:00and, like you said, pivot away from the United States
04:02because that is clearly Trump's choice, right?
04:05He does want to decouple, I think, from the major trading system
04:10that we're seeing, you know, in the past 80 years.
04:12And so I think countries are prepared for that.
04:14Yan Liang, good to see you.
04:16Thanks so much for coming on the program.
04:17Yan Liang, Professor of Economics at Willamette University.
04:20Thank you for having me.