Spate of recent cases may indicate China's emergence as trade bully
By Peh Shing Huei, The Straits Times/Asia News Network
September 28, 2012, 2:01 pm TWN
BEIJING -- No rare earths for Japan, bananas blocked from the Philippines and the famous salmon of Norway left to rot.
Increasingly, when China is angry with other countries, the rising Asian power chooses to hit back with an economic stick, raising fears of an emerging global trade bully.
Given its growing clout as the world's second-largest economy, such vengeful attacks, which Japan is feeling amid a territorial spat, can hurt.
But it does not. Not that much.
For all the fearsome talk of China using trade as a weapon, Beijing has taken a calibrated and pragmatic approach designed to attract headlines, but not hurt the bottom line.
Once the fireworks have died down and the nationalistic domestic audience has moved on to the next hot-button issue, Beijing usually eases up on sanctions, blockages and boycotts.
That was what happened with the Philippines. During a tense naval standoff over the disputed Scarborough Shoal in the South China Sea in April, the Chinese chose to hit back with a bit of fruit warfare.
The Chinese quarantine authorities blocked Philippine bananas, the country's second-biggest agricultural export, claiming the fruit contained pests.
It became a near all-out fruit blockage when China also began slowing the inspections of papayas, mangoes, coconuts and pineapples from the Philippines.
But by June, when the vessels pulled back, Chinese consumers were once again able to enjoy their Philippine bananas.
Similarly, despite being furious with Norway for awarding Chinese dissident Liu Xiaobo the Nobel Peace Prize in December 2010, China trod carefully in its reprisals. Like with the bananas, it imposed additional import controls on salmon from the Nordic country. It also postponed talks of a free trade agreement.
It made for good propaganda at home. Angry Chinese government punished disobedient Norway. The Communist Party has again stood up on behalf of the Chinese people, against the white men of the West, no less.
But trade between China and Norway actually soared to record levels in the first three months of last year — immediately after the Nobel award and diplomatic row.
Oslo's exports to Beijing were up more than 25 percent during that period compared with that in 2010, reaching more than US$500 million, according to official numbers from Norway.
Good business went both ways. Imports from China also rose 17 percent over the same period.
Now, it is the turn of Japan, a country that is no stranger to the economic wrath of China.
In 2010, after Tokyo detained a Chinese captain of a fishing trawler in an incident near the Senkaku islands, which China claims and calls Diaoyu, Beijing blocked shipments of rare earth minerals to Japan.