US-China trade war 'offers silver lining, opportunity' for developing countries

While the world may fret over the US-China trade war, this rivalry presents an opportunity for the developing world, an economics don said at the World Economic Forum (WEF) in Dalian, China.

- Michelle Ng

Given the US and European tariffs on Chinese exports such as electric vehicles (EVs), China has turned to places like South America to grow its EV and lithium mining industries instead. For instance, Chinese manufacturers such as BYD and Great Wall Motor have established production, research and development, and sales centres in Brazil.

The economic activity and innovation spurred by the US-China rivalry is a “phenomenal opportunity” for smaller and developing countries, said Professor Jin Keyu of the London School of Economics and Political Science.

These countries might be able to bypass traditional industries like manufacturing to go up the value chain by adopting more advanced technologies, she said.

This is especially critical as foreign direct investment in developing countries, which have been largely left behind in green development, fell by 9 per cent in 2023, Prof Jin said on June 27 during a panel discussion on US-China relations.

She added that there is no way the US and China can “decouple” given how deeply embedded they are with each other as the world’s largest and second-largest economies.