While China has become the Neighborhood Bully in Asia, new economic challenges on many fronts will determine how far it can go with that behavior. USA is reducing trade with China. Will USA expect Alaska producers to reduce trade to our top export destination, too?
China is now having economic problems...
[1]Why China’s economy ran off the rails, Substack.com, Noah Smith, Econ Blogger
Mexico and Canada have moved to the top exporters of goods to USA in the first half of this year, as economic decoupling between the two superpowers reduces China’s exports to USA by 25% for the first time in 15 years. China exports to Philippines have shown a steady increase over the last decade, reaching $64.68 Billion in 2022, while China Imports from Philippines continue to decline.
This may be retaliation for Philippines’ continued insistence that certain islands in the South China Sea do, in fact belong to them legally, as was determined in a 2016 arbitration which China now dismisses.
[2]Pres. Marcos: Philippines will not lose an inch of territory, Philippines Star, February 19, 2023
From that story: The Department of Foreign Affairs (DFA) filed a diplomatic protest against Beijing over China coast guard’s beaming a military-grade laser on BRP Malapascua, which was supporting a resupply mission to troops stationed on the grounded BRP Sierra Madre in Ayungin Shoal. The Chinese coast guards’ use of the powerful laser temporarily blinded Malapascua’s crew on the bridge.
[3]Timeline of South China Sea dispute.
And, as more evidence of criminal corruption by USA Vice-President Joe Biden becomes known, with payoffs from China, the US-China relationship becomes ever more difficult. Generally Americans are coming to regard China as an adversary in the face of the Covid Pandemic spawned in China and are choosing to not buy Chinese goods.
The cooling of trade relationships with China during presidency of Donald Trump did not harm Alaska, which continues to have robust exports there.
China has a Deep History with Philippines
The Philippine-Chinese community in 1997 represented about 800,000 to 850,000 people making up roughly 1.3 percent of the total Philippine population of 68 million, and represented the smallest ethnic Chinese population of all of the Southeast Asian countries, according to Teresita Ang See, an academic, writer and social activist. Ang See co-founded an organization seeking full integration of the Chinese-Philippine Community and is former President of the Philippine Association for Chinese Studies.
[4]The Chinese in the Philippines: Continuity and Change, Teresita Ang See, 1997
After World War II whole families including women were able to safely come to Philippines and local-born Chinese people were able to make this home and develop community. Previously, massacres and mass expulsions wiped out most Philippine-Chinese as China was seen as a threat to Imperial Spain.
Today China businessmen own many companies in Philippines and China has a distinctive influence on the country.
Alaska - China Connection
In 2011 Alaska exports to China totaled nearly $1.5 Billion, and China became our leading export destination surpassing Japan who had been our number one export destination since statehood in 1959. Annual exports to China were $1 Billion in 2017, according to Alaska Business Magazine. From the late 1970s to about 2015 China averaged 10% GDP growth annually but now is in decline.
[5]Alaska and China; Ties between the Middle Kingdom and Great Land, Alaska Business Magazine, Greg Wolf, February 2019
The fastest growth period for Alaska’s export shipments to China was between 2000 and 2011 when export values rose from a modest $100 million to reach almost $1.5 billion in just ten years. We’ve dubbed this period as the “Dragon Decade,” enthused Greg Wolf, Executive Director of the World Trade Center Alaska.
[6]Greg Wolf, Executive Director of World Trade Center Alaska
Seafood is the predominate export commodity from Alaska to China, accounting for 57 percent of the total. Minerals and ores is the second largest category at 27 percent. The two other notable export categories are energy at 7 percent and forest products at 6 percent.
Alaska Has Also Embraced China Culture
In the realm of higher education, the University of Alaska Anchorage is set to host a Confucius Institute, a program sponsored by the Chinese government to expand the use of the Chinese language and the understanding of Chinese culture. The Institute at UAA was established in 2008. In addition to teaching language classes, the Institute also hosts a number of cultural events each year for students and the community at large.
What IF the U.S. Government Restricts Alaska Trade with China?
On August 16, 2018, only two months after Gov. Bill Walker led a trade delegation to China the cybersecurity firm Recorded Future released a report detailing a Chinese government-linked hacking group’s attempts to penetrate computer servers belonging to the Alaska state government. These attempts occurred in the weeks before the trade mission but the Alaska Governor’s Office seemed unconcerned: Every day the State of Alaska, like most state governments, has anonymous activity on the perimeter of our networks that amounts to someone checking if the door is locked. The activity referenced here is not unique.
Had the Chinese hackers found a vulnerability and exploited it Gov. Walker would have likely made another excuse for this criminal behavior.
In fact, China and the United States have conflicts of interest and at times our relationship is adversarial. The message China likely got from this nonchalant response is: Some Chinese hacking is acceptable if challenging it would threaten the state’s robust economic relationship with China.
The proper response from a state official representing the People of Alaska should have been: Alaska has many friends in Asia who could also buy our high-quality natural resources.
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