Italian newspaper “Il Foglio” has discussed a politicized version of the debate between “More Europe or Less Europe? More free market or more protectionism?” quoting Salvini and Di Maio, the leaders of League and Five Star Movement. Here is my opinion.
Economic Protectionism or Liberalism. We discussed this topic in Al-Jazeera talk-show with other guests. Protectionism or free markets? Below are the basic points of dialogue on TV.
One of the main objections that I’ve recently received is the following: “what if the current shareholder wishes to sell out? In that case, it seems clear that the government cannot put any obstacles and cause the transaction to fail because in that case, it is the seller, the old shareholder, that would forgo the opportunity to cash in”. Here’s my answer.
Is it possible that there are ways of cooperation between the various countries of the European Union that are different and perhaps better than those in force today? The answer to this question is an obvious “Yes sure”.
In 2017, one of the biggest issues that the world will be facing is trade war, especially between China-US. President Xi and Trump have different views. Xi strongly encourages free trade between countries while Trump stresses the importance of fair trade. Michele Geraci has an even different view from both of them. He thinks that opening up trade and lowering trade barriers, in general, would benefit both countries involved, on average, but the problem is that these benefits are not always redistributed fairly within the country.
Trump is over blaming trade deficit for America’s current situation. But US has trade deficit to 101 countries, not especially to China. This is no longer a bilateral problem, but rather a multilateral problem which origins from America itself. One other reasons why America suffers a negative trade deficit is due to the international status of the US dollar. If there is an international crisis, the demand for dollar will increase because people consider dollar as the safest asset. Therefore dollar appreciates, whcih is bad for US’s international trade.
The European Chamber in China has just released a report commenting the “Made in China 2025” plan pursued by the Chinese Government. The report indicates the current challenges for CM 2025. One is the lack of skilled labors. The second challenge is overcapacity as a result of government subsidy over the past years. The third one is the challenge to international markets. I think another reason of worry is that most of the MA activity carried out by Chinese companies overseas, has actually been driven by the government encouragement. Therefore, it further represents market distortions.
The president of Italy is currently in china for an official state visit. This state visit comes at an interesting time for both China and Italy: the two countries are engaging more than before into a commercial dialogue of mutual respect and common interests, trade between the two counties shows good sign of improvement and Italian trade deficit appears to narrow slightly and capital investments made in the past couple of years have all helped improve the image that the Italian Business community has of China.