Chen Wenling: The rising US trade protectionism will lead to a trade war with China?

The trade protectionism in the United States has been on the rise recently, furthermore, the US government has frequently treated China as a big threat in various reports, not to mention the high anti-dumping duties imposed on the export of Chinese washing machines, aluminum foil and other commodities, all these have aroused great concern worldwide.

At the Monthly Economic Talk held by CCIEE on February 28, many well-known Chinese scholars believe that the reasons for the rising trade protectionism of the US can be summarized as the trade deficit between China and the US, concerns over the rise of China, the mid-term election in the US, the rise of the economic nationalism and the polarization of the US society.

Participants and scholars agree that both China and the United States should make their own contributions to the common ground while reserving difference, work together and share the benefits of development. Professor Jin Canrong, Vice President of China’s Institute of International Studies at the Renmin University of China said that the total sales of China’s retail market were 5.8 trillion US dollar last year, the same as that of the United States, and it will definitely surpass the United States this year. In the future, China’s retail market will become more liberalized. In terms of China’s overseas investment, especially in the Belt and Road initiative and in Latin America, finding a US partner will make China’s investment relatively easier and safer.

Chen Wenling, Chief Economist of CCIEE suggested that China and the United States should also consider restarting the negotiation on the BIT and even work toward the signing a free trade agreement. A study of the Peterson Institute for International Economics in the United States shows that if China and the United States sign the Free Trade Agreement (FTA), the volume of the bilateral Trade will increase by 500 billion US dollar, representing a huge potential for both sides. She also recommended that China should continue to push forward the negotiation on the US-China BIT because the two sides have already had 29 rounds of negotiations and thus a basic consensus has already been reached, we just need one final step.

Many scholars also said that it is unlikely that a trade war will break out between China and the United States, but conflicts in certain industries are inevitable. If the United States insists on its own course, China will take the necessary measures to safeguard its own legitimate rights and interests.

Lv Xiang, an expert on US issues from the Chinese Academy of Social Sciences, believes that China and the United States should strive to establish a new pattern of economic cooperation based on trade, energy and infrastructure in the new era. The majority of the $ 253.5 billion deal reached by China and the US during Trump’s visit to China are intentional agreements, with at least 200 billion involved in energy, not just purchases, but also infrastructure construction in places like Alaska and West Virginia. He thinks that China and the United States should also consider the construction of a Pacific-oriented energy export port in Oregon or California.

From a historical perspective, the economic and trade relations have always been the ballast stone of the bilateral relations since the establishment of China-US diplomatic relations 40 years ago. Relevant data show that the bilateral trade between China and the United States has risen more than 200 times from the initial 2.5 billion to more than 580 billion U.S. dollars last year. The US exports 62% of its soybeans, 14% of cotton, 25% of Boeing aircraft, 17% of cars, 15% of the integrated circuit to China.

The participating experts believe that the complementarity of the US-China economic and trade cooperation outweighs competition between them and it would be so narrow-minded if the US only focus on economic and trade imbalances.