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Take a Rational Approach toward Sino-US Trade Frictions
2018-10-17
Long Guoqiang, DRC
2018-8-29
Sino-US economic and trade relations have served as the “ballast stone and “stabilizer” of the relations between the two major powers. However, since this year, the United States has taken unilateral measures and provoked a trade war, resulting in the escalation of trade frictions and disputes between China and the United States. How to understand the current Sino-US trade frictions and how to deal with the trade war provoked by the United States? These problems have attracted the attention of all sectors of the society.
Economic and trade cooperation between China and the U.S. will benefit both countries, while trade war will hurt both sides. The stability of Sino-US economic and trade relations is not only related to the interests of both sides, but also to the world development. First, the impacts of Sino-US economic and trade cooperation influence different aspects. 1. China and the United States are important partners in the trade of goods. 2. Service trade is playing an increasingly important role in bilateral economic and trade cooperation. 3. The investment volume between China and the United States is huge. Second, Sino-US economic and trade cooperation can benefit both sides. 1. Bilateral economic and trade cooperation has provided huge market opportunities for enterprises on both sides. 2. Bilateral economic and trade cooperation has created many employment opportunities for both countries. 3. Bilateral economic and trade cooperation between China and the United States has promoted the upgrading of the industrial structure of the two countries and has provided more cost-effective goods and services to consumers in both countries, thus consumer welfare has been increased. The US attributed the imbalance in Sino-US trade in goods to “China's unfair practices”, according to which the US “suffered a loss” in bilateral economic and trade cooperation. This is a lopsided view. Third, Sino-US economic and trade cooperation is complementary to both sides. China is the largest developing country while the United States is the largest developed country. The two countries differ in resource endowment, development stages, industrial structure and international division of labor. Despite the increasing competition in bilateral economic and trade relations, the basic pattern in which China and US economy are highly complementary to each other is not changed.
The real reasons for the U.S. to launch the trade war. The reasons why the United States launched a trade war are complex and profound, and they can be summarized as follows. First, extortion of interests. In solving Sino-US economic and trade problems, the United States ignored China's great sincerity, betrayed the consensus reached by both sides and launched a trade war unilaterally. Its direct motive is to force China to further expand market access to the United States in trade and investment and to increase the purchase of American products, thus enabling the United States to obtain more economic benefits while transferring domestic conflicts to the outside world. Second, strategic containment. After the cold war, the United States has become the world’s only superpower in terms of science and technology, economy, military and financial strength. In order to maintain its hegemonic position in the world, the United States has kept high alert to prevent any country from catching up with him. Both the former Soviet Union and Japan were once curbed by the United States through various measures. Trade war is not only a means for the United States to obtain more economic benefits, but also an important means for the United States to curb China. The U.S. attempted to impose a tariff of 50 billion US dollars on Chinese export products mainly including items in the high-tech fields relating to “Made in China 2025”, and this reflects the US intention to curb China’s technological catch-up endeavour. Third, suppression of the Chinese mode. Viewing from the perspective of maintaining US global hegemony, the United States has criticized China's development mode repeatedly. In international economy, the United States has placed domestic law above the international law, deliberately prevented the appointment of new judges to the World Trade Organization’s appeal body, and ignored China’s efforts in keeping its WTO commitments, observing the rules of the multilateral economic and trade system, and promoting trade and investment liberalization and facilitation. Its motivation is to stigmatize China’s development mode through public opinions and force China to change its original development mode through tariff war, as well as science and technology wars. It is not difficult to see that the U.S. has diverse motives for launching a trade war and the reasons are improper, their actions are not in conformity with the rules of the World Trade Organization, and the impact is bad and far-reaching.
We need to properly deal with Sino-US trade frictions. First, we need to deal with Sino-US trade frictions from the perspective of safeguarding China’s development environment. As the U.S. has defined China as a “strategic competitor”, Sino-US relations will undergo profound adjustments. We should not only give up illusions and fight firmly, but also maintain rationality and strive to maintain overall stability. We should fully understand the complexity of Sino-US trade frictions, fight the war on just ground, to our advantage and with restraint and follow the principle of unwilling to fight, but not afraid to fight and fight if we are forced to. Second, we need to prepare comprehensive policies and properly respond to short-term impacts. The negative impacts of Sino-US trade frictions on China's macro-economy is limited and controllable. According to the research finding by some institutions, the imposition of a 25 % tariff by the U.S. on 50 billion US dollars products that exported by China to the US will affect China’s GDP growth by about 0.1 percentage point. However, adverse effects may spread to many areas through expected changes. Therefore, we should attach great importance to the comprehensive implementation of policies and properly respond to them. Third, we need to maintain strategic focus and fulfill relevant tasks. The key to dealing with a trade war is not to be interfered with by the U.S. but to maintain our strategic resolve and avoid making subversive mistakes. Former Soviet Union was dragged into an arms race in the cold war and Japan's bubble economy loomed up in the trade war. Those are profound lessons that we should learn. We must draw lessons from other countries, maintain our strategic focus, and do our own things well in order to realize the goal of building a modern and powerful socialist country in an all-round way. Fourth, we need to strongly advocate free trade and safeguard the authority of the multilateral trading system. We need to actively promote the free trade zone strategy and the construction of “the Belt and Road Initiative”. While fulfilling the responsibilities of a great power commensurate with its own strength and development at present stage, we need to adhere to the concept of cultivating a community with shared future for mankind, and make new contributions to building a clean and beautiful world in an open and inclusive manner with lasting peace, universal security and common prosperity.
