Strengthening Pakistan’s Climate Change Policy

By: Saddam Tahir

Climate change is not only an environmental challenge; rather it has evolved into a security and developmental challenge over the years for countries across the globe. With changing climate scenarios, Pakistan’s development model needs to go through a paradigm shift, creating a second climate science arm. All economic planning and investments, out of necessity, need to be an exercise in planning and investment of climate adaptation, duly informed by institutions generating climate knowledge and providing climate services. Climate services can help the country pursue three tracks:

  • Climate adaptation
  • Disaster-risk reduction
  • Sustainable development

In the annual report for 2020, Global Climate Risk Index has placed Pakistan in the fifth position on the list of countries that are most vulnerable to climate change. According to the report from 1999 to 2018, Pakistan has experienced 152 extreme weather hazards, faced economic loss worth $3.8 billion, and 9,989 people have died. Based on the statistics recorded by the think tank, the report concluded that Pakistan’s vulnerability to climate change is intensifying. The report points out that Pakistan is “recurrently affected by catastrophes and continuously rank among the most affected countries both in the long-term index and in the index for the respective year”. Due to the geographical location, Pakistan has become most vulnerable to climate change and hence placed on the long-term index of the report. One of the co-authors of the report David Eckstein registers in the report that “the entire region where Pakistan is located is prone to extreme weather events, in particular, heavy rainfalls e.g. during monsoon season, and floodings as a result.”

This year’s report is particularly relevant for Pakistan as climate change is fast “increasing variability in the water cycle, inducing a greater number of extreme weather events, reducing the predictability of water availability, and adversely affecting water quality”. Three water-related issues are central to climate adaptation in Pakistan:

  1. a) Water stress, reflected in increasing uncertainty and scarcity.
  2. b) Hazards and disasters reflected in floods, droughts, storms surges, and glacier lake outbursts.
  3. c) Water quality is reflected in the deteriorating quality of ground and surface water used for drinking, irrigation, and industry.

As the early warning systems continue to be underdeveloped and underutilized, the national meteorological and hydrological services remain weak. National public institutions mandated to provide hydrological information, therefore, lack the necessary capacities needed to provide climate services for water. The results are perilous: human, social, and economic losses are continuously soaring as floods have globally increased by 134 percent and droughts by 20pc in the last two decades. This gives Pakistan all the more reason to augment climate services.

Despite international support and growing climate vulnerabilities, Pakistan has not developed its National Framework for Climate Services (NFCS). The presence of an NFCS will provide an institutional mechanism to coordinate, facilitate and enhance collaboration among national institutions to improve, jointly produce, deliver and use science-based climate projections and services. Some regional countries like China and India who developed robust national frameworks have successfully accessed global science and technology, as the GFCS seeks to build on continued improvements in climate forecasting to increase access to the best climate data. Planners, investors, and vulnerable communities have the right to benefit from easy-to-use information so that they can plan and cope with projected trends and scenarios.

Since Pakistan’s datasets on temperature, precipitation, soil moisture, snowfall in glacial areas, ocean conditions, and winds are absent or inaccessible, policymakers are not always informed about long-term historical averages of these parameters or their risks. Development planners end up shooting in the dark by taking decisions without knowing long-term projections and trends. However, Pakistan’s leadership remains fully committed to addressing the concerns and threats of climate change. As multiple projects of reforestation took place in the last few years to tackle natural disasters.

 




Understanding 2021 Inflationary Spiral in Pakistan

By Hira Shakeel

For the people of developing countries an increase in prices of basic goods, especially food items and fuel hike in comparison to the little or no increase in the wages has become a struggle for survival. This situation presents additional challenges for the daily wage earners and for the low-income households. The rate of inflation in Pakistan has edged up to a daunting double figure of 10.9%, which presents a gloomy picture for the poor. Pakistan Bureau of Statistics (PBS) recorded a price hike of 9% from 8.4% in September alone on consumer items. In 2018, the increase of inflation was recorded at 3.93%, but three years later this has increased to more than 10%.

Pakistan is a net importer of energy and relies on the exports of raw materials, especially from the agricultural sector. The fluctuation in the prices of the raw material in the international market affects the stability of the local market in Pakistan, making it more fragile. For years, modernizing and strengthening the agricultural base of the country has been neglected by the leaders. This neglect has proved detrimental, because although Pakistan is majorly an agricultural country, it has become a net food importer. Moreover, as Pakistan imports oil from abroad, the purchase weighs heavily on the import bill of the country. Any increase in the price of fuel globally, does not only lead to inflation in Pakistan but at the same time the exchange rate is pressurized downward which makes imports more expensive. This eventually leads to a trade deficit, i.e., when the country’s monetary value of imports surpasses the monetary value of exports.

Neglect of the agriculture sector coupled with the failure to address the domestic supply disruption, for instance, the unforeseen shortage of wheat and sugar, have contributed to the hike of prices. Although the claim of the government that prices of the products have been increasing globally since the spread of the pandemic in 2019 is not wrong. However, claiming to still have the lowest prices as compared to the regional countries is partially true. In comparison to India or Bangladesh the prices of petroleum might be lower in Pakistan but at the same time country’s even lower per capita income wipes out the advantage of these low prices.

Most of the basic goods, which includes food items such as sugar, rice, ghee, wheat, energy, telecom services, transportation, and clothing have seen a surge in prices. Any increase in the prices of electricity or fuel impacts the prices of three sectors in Pakistan, namely food, transportation, and housing.

The limited employment opportunities and the low wages have made it difficult for people to fulfill their basic needs. While the job opportunities are diminishing, the surge in prices is making it unbearable for the people. The living standard of a common man continues to depreciate due to higher inflation. A pro-poor policy does not mean an increase in the regressive nature of taxes, i.e., those taxes which is applicable to be paid by citizens regardless of their income. Further, the direct tax is mostly left unaccountable due to the negligence of the authorities as it remains undocumented.

Any increase indirect taxes means an increase in prices. This has a direct impact on a common man, as his purchasing power parity drops. When such a situation arises it eventually pushes a family towards lower standards of living, due to the constrained choices. At a societal level, an increase in direct taxes, leads to a hike in prices of common goods, consequently widening the gap between social classes. The purchasing power parity of an individual with a fixed income is most affected because there is no increase in their income.

In the longer run, a persistent situation like this can lead to a conflict within the country. According to a report issued by the UNDP, inflation has become a headache for almost every citizen in Pakistan except those 20 percent who own more than half of the country’s wealth. If inflation has become a challenge for the people, it presents a challenge for the government too.

Before suggesting what the government can do to control the prices, it is crucial to look at the origin of the challenge. Primarily, major industrial economies have been vulnerable due to COVID-19, but their recovery has been recorded much quicker than expected. This has increased the global consumption of energy and other commodities. Therefore, there has been a hike in fuel prices globally.

Additionally, the prices of products such as palm oil, wheat, sugar, and fertilizers have also increased. Eventually, when the products are shipped and land in Pakistan there is an additional cost, which makes these commodities expensive. Considering this global hike in prices and adding the issue of the deprecating Pakistani rupee against the dollar presents a two-fold challenge. This has a direct impact on the imports of Pakistan, thus the reason for the increase in prices. The strengthening of the rupee is not an easy task, because it is directly attached to the condition of the national economy and the inflow as well as the outflow of the foreign exchange.

In the case of Pakistan, the economic growth is slow and weak, plus the outflow of foreign exchange is much higher than the inflow, appreciating the value of the rupee is unlikely. Keeping the value of the rupee higher against the US dollar will have a huge impact on the economic condition of Pakistan because the meager foreign reserves that Pakistan has will be used for this purpose. The little foreign reserves that the State Bank of Pakistan has are important to meet the trade deficit of the country.

Much of the hike in prices is due to the reason that Pakistan is receiving aid from the international donor agencies on certain conditionalities, which require devaluation of the currency, cutting down on subsidies and welfare projects, and increasing prices. There is a serious need to amend the economic policies in the country and focus on strengthening the industrial and agricultural base of the country if the government wants to address the challenge of uncontrollable inflation. Secondly, at both district and level, the weak administrative mechanism has led to a hike in prices. It is due to their weakness that there is a gap between the wholesale price and retail price. However, to such challenges, there is no quick or immediate solution.

For swift action, the government can reduce the duties and taxes on the imported items but in the long run it can lead to a fiscal deficit. The only way that Pakistan can overcome its current economic challenges, is by focusing on increasing its exports which will increase the inflow of dollars in the country.  Besides increasing its exports, Pakistan can induce foreign direct investments (FDIs), and open more channels for securing remittances from Pakistanis in foreign countries. Until and unless, the government does not address the economic challenges, create more job opportunities, give subsidies to the local industries, and improve the purchasing power parity of its citizens, inflation will remain the biggest obstacle to Pakistan’s growth.




China’s Interests in Afghanistan: Post U.S. Military Withdrawal

By Zara Qurban

Since the withdrawal of the U.S. troops and its European allies after decades of war in April 2021, Afghanistan is entangled in the wickedest kind of security. Afghanistan’s commandeering by the Taliban after the U.S. military withdrawal has presented the regional States with many new emerging challenges. An abrupt withdrawal of the U.S. military from Afghanistan has created a huge power vacuum and neighboring States are extending helping hands to avert the possible fall of Afghanistan.
Countries such as Pakistan, Russia, India, Iran and Turkey have their own grounds to intervene but now the global are on China including re-evaluating its persistent ‘non-interference’ policy. China was against the invasion of the U.S. military and also opposed the abrupt withdrawal stating that it will leave Afghanistan in mayhem. China’s Foreign Ministry said “the recent abrupt U.S. announcement of complete withdrawal of forces from Afghanistan has led to a succession of explosive attacks throughout the country, worsening the security situation and threatening peace and stability as well as people’s life and safety.”
Many spectators are considering the exchange of dialogues between Chinese Foreign Minister Wang Yi and the Taliban leaders an attempt by China to exert more influence in the region. But, China does not look at Afghanistan from the lens of prospects, the Chinese influence and involvement, especially after the U.S. military withdrawal, is all about the management of threats. Another observation entails that Chinese political and economic interest in Afghanistan revolve around the wariness of Afghanistan becoming a safe haven for militant groups targeting China like the last time Taliban were in power.
Though Mullah Baradar and Wang Yi in Tianjin have been in contact for decades, the Taliban’s ideological agenda does not fit well with China. Andrew Small, Associate Senior Policy Fellow, states, “China certainly has substantial commercial and economic interests in the wider region, but they are minimal in Afghanistan itself. Its major investments there, the Aynak copper mine and the Amu Darya energy projects, have been in stasis for many years. There have been numerous discussions about Afghanistan’s involvement in the Belt and Road Initiative, including connections to the China-Pakistan Economic Corridor, but Beijing’s view has been that, in Afghanistan, stability has to precede serious new economic commitments.” Other than copper, Afghanistan has untouched mines of minerals such as cobalt, iron, mercury and lithium which are estimated to the value of about $1 trillion.
In order to maintain better political and economic relations with Afghanistan, China offered to rebuild the infrastructure “by funneling funds directly to the group through Pakistan.” As a result to continuous exchange of dialogues and China’s commitment of support in Afghanistan, the spokesman for the Taliban Political Office in Qatar established that they recognize China “as a friend of Afghanistan”, he also stated that Taliban and Afghanistan will no longer provide refuge or safe haven to Muslim Uyghurs. On one occasion the Chinese foreign minister said that Taliban are expected “to play an important role in the progress of peaceful reconciliation and reconstruction in Afghanistan.”
China’s policy towards Afghanistan is primarily based on the security implications resulting from the U.S. and Taliban peace agreement, which China believes in not going in the right direction. The disturbances, instability and radicalization will eventually seep through the borders into China. As per the researchers based in Afghanistan, “through military assistance, China helped Kabul build its military mountain brigade in the Wakhan Corridor near Afghanistan’s northern Badakhshan province with the primary goal of preventing infiltration by the Islamic State into China.” It is believed that Beijing will keep close bilateral ties with Afghanistan in order to tightly manage any spill over into China by engaging all its diplomatic energies because it fears that the success of Taliban might encourage militant groups to carry out terror activities. If the security situation becomes better in Afghanistan, China is likely to go forward with more investment plans and programs but it will be very cautious.










Religious Extremism: Lynching against Minorities

The minority question has been controversial in India. With the success of Hindu nationalist Bhatrtya Janata Party and other extremist religious groups, atrocities against minorities in general and Muslims in particular have increased. BJP, Shiv Sena and Rashtriya Swayamsevak Sangh (RSS) are thriving with an agenda of turning Indian secular state into a Hindu state. India is well known for its political framework and shared historical background. It has operated under the precursor of secularism to deal with its ethnic, cultural and multi-religious diversity. But the conflict between this secular ideology and minority rights remained unresolved.

Article 29 to 30 and 35A to 35B of the Indian constitution, talks about minority rights but the word minority lacks a legally acknowledged definition. Similarly, the word secularism is highly misinterpreted with anti-religion phenomena. Religion-based and under-privileged class minorities of India are marginalized in the socio-economic environment. The ideal of secularism has failed to serve equal opportunities and rights to the Indian minorities.

Current wave of Hindu extremism has shaken the foundations of the secular India. It is becoming difficult for minorities to live in India with their religious and ethnic identities. Animosity of Hindu religious fundamentalists are not only limited to Muslims but other minorities including Sikh and Christian fraternity had also been a subject of majoritarian violence, hatred and anxiety. The contradiction in the secular principles of the state was evident when Muslim community was singled out in 1992 Babri Mosque incident and the state could not protect and control the masses. Similarly, in 2001 Muslims were the victims of hatred in communal riots when fundamentalist groups settled Dalits against them. Moreover, Kandamal riots in Orissa (2008) members of Christian community became the victim of communal violence and relief administration was stopped by the administration from taking any relief work.

There has been a gradual increase in the number of attacks against Muslims and low-caste Dalits since 2014, by the groups claiming to protect cows, considered sacred by Hindus. The government under PM Narandra Modi has failed to stop these incidents of lynching. Currently a 10 minute video of a 24-year-old Tabrez Ansari from Jharkhand caught the attention of religious minorities all across the globe. Tabrez was tied to a pole and was beaten for 12 hours. He was forced to chant “Jai Sri Ram” (hail Lord Ram) a Hindu hardliner slogan. Similarly, a 15-year-old boy was set on fire for not chanting this slogan.

There has been series of incidents in India where the victims were attacked for allegedly not chanting “Jai Sri Ram”. At present it seems that BJP is following soft Hidutva policy and has been ineffective to duly recognize the minority rights and champion their cause.

BY 




USA Military Aid to Pakistan – Recent Developments

USA Military Aid to Pakistan – Recent Developments

Pakistan’s geographical location and borders sharing with states like India, Afghanistan and Iran made it impossible to achieve peace without weapons and military advancement. Pakistan has always been under constant threat of being attacked directly or circuitously. We are witness to all the attempts of subverting Pakistan from within and India has been actively participating in that. By keeping in view the deterioration of economic condition and increase in advanced defense system USA has been providing military assistance to Pakistan since long. The unfortunate incident of 9/11 became a challenge for Pakistan to fight against terrorism and militancy along with other internal and external challenges.

To crack down on militants and their safe havens in Pakistan USA passed five year plan 2009-2014 under former president Barak Obama and $7.5 billion worth of assistance was provided. This bill also created a bit of cleft between civil and military leadership in Pakistan because it was looked upon as threat to sovereignty by military. Along with internal and external security threats, even though Pakistan lost thousands of citizens and military personnel and billions of dollars to this fight, it was constantly hammered to destroy militant’s safe havens in Pakistan and USA kept warning Pakistan that if they found any traces of attacks on USA soil back to Pakistan there will be severe consequences.

After Obama the pressure mounted when Trump started the chant of “Do More” because Pakistan was given $33 billion since 2002 to fight the militants and accused Pakistan of quietly supporting Haqqani network and providing militants with safety on their soil. It was said that rather fighting terror, Pakistani military used $200 million funds for armament, anti-missile defense system and fighter aircrafts including F-16s when the terrorists had no air attack capability. Pakistan has received about $15 billion over the past 15 years including funds for Foreign Military Financing, Pakistan Counterinsurgency Capability Fund and International Military Education and Training funds. In January 2018, USA announced that it was suspending $900 million of security aid and military equipment to Pakistan because it failed to fight effectively against terrorists and militancy.

Pakistan was ashamed and accused internationally for not putting “enough effort” and just using the USA for the sake of money. The relationship was sore between Pakistan and USA until the recent meeting of President Trump and PM Imran Khan where the PM of Pakistan emphasized that USA and Pakistan need to have a good working relationship to proceed ahead on good terms. Trump showed optimism by saying that the USA and Pakistan have a better relationship now and that USA State Department will provide Pakistan $125 million for its F-16 aircraft’s technical assistance. PM Khan further assured president Trump that Pakistan will do whatever it takes to keep going the peace process and that there are and never will be any safe havens for militants in Pakistan.

BY 




PM Visit: Trade and Economic Cooperation

The three day visit of Prime Minister Imran Khan seems to have struck a chord and both President Donald Trump and PM Imran Khan have found some common grounds to move forward on. This week’s summit talks turned out to be a positive initiative from both sides as they kept aside their bitterness and grievances. This meeting broke the ice and both the countries are now back on track to have bilateral relations. Pakistan’s President’s visit to the United States was not only a good step to the outer world but was a good indicator for Pakistan’s economy too.

The talks revolved around four different subjects including the peace process in Afghanistan, the Kashmir issue between two contending rivals India and Pakistan, regional security, and fostering trade and economic relations. Trump on Monday also hinted at the possibility of restoring about $13 billion aid to Pakistan that was suspended in 2018. Outcomes of these talks indicate that the bilateral ties between both countries will grow in the near future.  However, the US is dangling the possibility of stronger trade and economic relations with Pakistan if it helps with the peace talks in Afghanistan and do more to crack down on terrorism within its borders.

Investment and economic cooperation were of a more prime concern than the renewal of the US aid to Pakistan. Because the US has been Pakistan’s important development, investment, and trade partner and Pakistan’s second largest export market after European Union with total trade of $6.627 billion during FY 2018-19 and over $1.5 billion worth of investment. Moreover, The American President also showed interest in raising the US investment and expanding trade relations with Pakistan.

Acknowledging that there have been ups and downs in Pakistan – U.S relations Pakistan is looking forward to discover ways and means to deepen its economic relations with Washington through a constructive and positive approach. This cooperation will be beneficial for both the countries. Pakistan is expecting US engagement in the areas such as economy and finance, energy, science, and technology as well as agriculture. These areas have the potential to build up long-term economic growth, stability, and human development.

Indeed, this three-day visit to Washington has helped to soften Pakistan’s relations with the US. Now is the time when the US investors must convince their potential investors to invest in Pakistan and should transfer the latest technology to Pakistan. Moreover, Pakistan should focus more on its private sector by providing all kinds of support and skills to boost its exports.

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E.U. Pledges to Fight Back on Trump Tariffs as Trade War Looms

By 

European Union officials unveiled an array of tariffs on Wednesday that they would place on American-made goods if the United States followed through on President Trump’s plan to impose penalties on imported steel and aluminum, raising the specter of a trade war.

The announcement in Brussels was the latest rebuke to Mr. Trump’s proposed tariffs, which have met with consternation domestically and with threats of retaliation abroad. The president’s top economic adviser, Gary D. Cohn, said on Tuesday that he was resigning, a move widely believed to be linked to the trade plan, which he had lobbied against. Republican leaders, including Paul D. Ryan, the House speaker, have also railed against the tariffs.

Internationally, the plan for the new American tariffs — blanket penalties of 25 percent on imported steel and of 10 percent on aluminum — have drawn concern from allies including Britain and Canada, as well as from rivals like China. The European Union had warned of retaliatory charges last week, and outlined those plans on Wednesday.

Such a move by the United States would “put thousands of European jobs in jeopardy, and it has to be met by a firm and proportionate response,” Cecilia Malmstrom, the European Union commissioner for trade, said at a news conference in Brussels. European officials have been meeting with their counterparts in Washington, urging them to revisit the plans, she added.

If the American tariffs are put in place, Ms. Malmstrom said, Brussels could take three steps: It could take the case to the World Trade Organization, add safeguards to protect the European Union against steel diverted from the United States, and impose tariffs on a series of American-made goods.

A provisional list of items being targeted ranges from steel to T-shirts, also including bed linen, chewing tobacco, cranberries and orange juice, among other products. The overall size of the business affected is relatively small, worth about 2.8 billion euros, or $3.5 billion, in imports, paling in comparison with the nearly €250 billion of goods the 28-nation bloc bought from the United States in 2016.

European leaders were quick to stress that they did not want to trigger a wider trade dispute, with Donald Tusk, the president of the European Council, saying in a tweet that trade wars were “bad and easy to lose,” a reference to an earlier tweet by Mr. Trump in which he claimed they were “good and easy to win.”

Officials elsewhere have also tried to cool tensions. Christine Lagarde, the head of the International Monetary Fund, warned in an interview on French radio that in a trade war, “nobody wins, one generally finds losers on both sides.”

But it reflects concern in Europe over the possible impact of new American tariffs, notably on steel. The United States is the world’s largest importer of steel, and while many of Mr. Trump’s arguments have focused on cheap steel from countries like China, the European Union as a whole is the single biggest exporter of steel to the United States. At the same time, the region is concerned that cheap steel that had been destined for the United States could now flood the Continent, putting significant pressure on European producers.

President Trump’s push for tariffs is driven by his fixation on trade deficits. But most economists do not worry about trade deficits, and disagree with the president’s characterization of them.

While retaliation from Brussels appears limited for now, it could have an impact on American domestic politics. Bourbon, one of the products that European officials have targeted, is made in Kentucky, the home state of Mitch McConnell, the Senate majority leader. Other items that could face tariffs are motorcycles, and the corporate headquarters of Harley-Davidson are in Wisconsin, Mr. Ryan’s state.

“The Europeans have rights, too, to retaliate,” said Peter Chase, a former American diplomat who is now a senior fellow at the German Marshall Fund in Brussels focusing on trade. “The E.U. is concerned that behind it all, there are people in the U.S. administration that don’t care that there might be damage to the international system of rule of law that we have created.”

The list, which was leaked on Monday and has been referred to by the European Commission president, Jean-Claude Juncker, is subject to the agreement of the bloc’s 28 member states.

It highlights how sharply the outlook on trade between the United States and Europe has shifted. Since 2013, Washington and Brussels have been negotiating a vast trade deal, known as the Trans-Atlantic Trade and Investment Partnership.

By late 2016, however, those talks appeared to have reached a stalemate, and Mr. Trump’s withdrawal from a similar pact with Pacific Rim countries early in his presidency signaled the death of the European agreement, as well.

The steel and aluminum tariffs have triggered a strong reaction, with business executives and political leaders voicing opposition.

The strong negative reaction to Mr. Trump’s planned tariffs appears to have had little impact on the president, who insisted this week that he would not back down.

On Tuesday, Mr. Trump singled out the European Union, which he said had “not treated us very well, and it’s been a very, very unfair trade situation.” The president warnedthat the United States would also consider raising its tariffs on cars made within the bloc if the European Union were to retaliate.

While he left the door open for compromise with allies, tensions are rising in Europe.

“We’ve loaded the guns,” said Charles de Lusignan, a spokesman for the European Steel Association, a lobbying group, “and we’re ready to use them in case the aggression comes.”

Courtesy: The New York Times




China calls on US and North Korea to have talks as soon as possible

China’s foreign minister Wang Yi called on the United States and North Korea on Thursday to have talks as soon as possible.

He said that peace must prevail, amid signs of easing tension over North Korea’s nuclear and missile threats.

Wang made the comments during a news briefing as part of the annual meeting of China’s parliament.

Courtesy: CNBC




China says resolve to protect peace, stability in South China Sea unshakeable

China’s resolve to protect peace and stability in the South China Sea is unshakeable, Foreign Minister Wang Yi said on Thursday.

Speaking on the sidelines of an annual meeting of China’s parliament, Wang said some outside forces were trying to muddy the waters in the disputed region.

China has repeatedly accused countries outside the region – generally a reference to the United States and Japan – of trying to provoke trouble in the South China Sea while China and its neighbors are trying to resolve the matter through diplomacy.

Courtesy: Reuters




China denies trying to supplant US role in global affairs

By Teddy Ng

Foreign Minister Wang Yi said on Thursday there was competition between China and the US, but the two nations should treat themselves as partners rather than rivals.

“Some people in the United States believe that China is overtaking the role of the US in international affairs. This is a fundamental strategic misjudgment,” Wang said at a press conference on the sidelines of the National People’s Congress in Beijing. “If you say there is competition between China and the US, this should be positive competition and this is normal in international relations.”

His remarks came as the latest US national security and defence strategy listed China as a “strategic rival” and called for a strong economic, military and technological response to confront it. Washington has also vowed to take tougher trade actions against China, including imposing heavy tariffs on steel and aluminium imports.

China only accounts for about 3 per cent of steel imports into the US, far less than the 41 per cent produced by Canada, but critics fear the Trump administration may go ahead with further trade actions targeting China, amid US government allegations of unfair trading practices.

Wang described Washington’s trade sanctions as the “wrong remedy”, saying they would damage both sides. “China will take a legitimate and necessary response,” he said.

US President Donald Trump says his administration has asked China to help trim its huge trade surplus with the US.

Trump said in a tweet on Wednesday: “China has been asked to develop a plan for the year of a one billion dollar reduction in their massive trade deficit with the United States.”

The Trump administration is also considering broad penalties, including further tariffs on Chinese imports and restrictions on its technology investment in the US, sources say, following a US investigation into alleged Chinese theft of US intellectual property.

Beijing has said it will work with other nations affected by Trump’s tariff plans to protect its interests. It raised its concerns at a World Trade Organisation meeting on Wednesday where 17 other WTO members also expressed their opposition.

WTO spokesman Keith Rockwell said: “Many said they feared tit-for-tat retaliation, which could spiral out of control, damaging the global economy and the multilateral trading system.”

Courtesy: South China Morning Post