On February 28, CCIEE held the 104th Monthly Economic Talks in Beijing. Many experts on international issues discussed the current issues relating to the US-China Relations.
Preventing the US-China Trade Friction from Getting Out of Control
In 2018, the U.S. Department of Commerce has frequently launched the anti-dumping and countervailing duties investigation on China's exports since the United States officially announced that it would impose restrictions on the global import of photovoltaic products and large washing machines. Moreover, the United States has intensively set up "glass doors" and "spring doors", making it very difficult for the Chinese companies to invest and operate in the US. In response, China's Ministry of Commerce warned that the economic and trade problems between China and the United States are being politicized, which will ultimately harm the interests of both the Chinese and American enterprises and the vast number of consumers, and impede the economic development of the two countries.
Chen Wenling, Chief Economist of CCIEE believes that the US has sent a clear signal of launching a trade war. According to the Wall Street Journal report on February 25, Peter Navarro, an economist who has influenced the US President Trump in trade protectionism, will be appointed as the president’s assistant. He once wrote a documentary entitled "Death by China," seeing China as a major threat to the US and proposed to impose a 45% tariff on China and start an exchange rate war during the Trump’s presidential campaign. Apart from that, Trump named Harry Harris, an Admiral in the United States Navy serving as the 24th Commander, United States Pacific Command (USPACOM), as the ambassador to Australia. Harris often takes a hard line against China. The two appointments signify that Trump is prepared to begin a trade war.
Chen Wenling reckons that the trade frictions between the US and China is escalating. If a trade war breaks out, the US will suffer no less than China for two reasons. On the one hand, the trade protectionism of the United States restricts the export of high-tech products, which will force China to accelerate its development of high-tech products. On the other hand, China is the main export market for many US commodities and thus, losing the Chinese market will be a heavy blow to the United States.
Ruan Zongze, Executive Vice President of China Institute of International Studies, said that the United States has never stopped conducting trade investigation on China since the establishment of diplomatic relations between China and the United States. Therefore, we should maintain a normal attitude towards America’s trade investigation and prevent it from losing control. Generally speaking, the US－China Relations are now relatively stable, and no one has the will and the strength to end it and start all over again.
10 days after the Chinese State Councilor Yang Jiechi visited the United States in early February, Liu He, member of the Political Bureau of the CPC Central Committee and Director of the Leading Group for Financial and Economic Affairs, started his five-day visit to the United States. “Two Politburo members have visited the United States in such a short period indicate that the Chinese government attaches great importance to its partnership with the United States,” said Jin Canrong, Vice President of the School of International Studies at Renmin University of China.
Promoting US-China Cooperation with Multiple Channels
Unlike most of the people who are concerned about the competitive nature of the China-US Relations, the participating experts put more emphasis on cooperation and win-win outcome. They believe that the two nations should work on seeking common ground while putting aside differences, expanding the market and sharing the benefits of development.
"In fact, complementarity is the main feature of the China-US relations. The restriction will not be able to solve any problems. The key solution lies in expanding and strengthening China-US economic and trade relations. The bigger the cake, the more benefits we will get," explained Ruan Zongze.
The volume of the trade between China and the United States has increased more than 200 times, from 2.5 billion dollar to more than 500 billion over the past 40 years. In less than 40 years in the future, it is possible to push the trade volume between China and the United States to Trillions of dollars. China and the United States should work together to explore the third-party markets and the expansion of markets, which will further promote the China-US Relations.
Chen Wenling suggested that China and the United States should promote further cooperation through multiple channels. Firstly, China and the United States should work hard on the Free Trade Agreement (FTA). According to a report published by the Peterson Institute for International Economics in 2014, the China-US trade volume will increase 500 billion dollars if they can reach consensus on the FTA. Secondly, we must unswervingly push forward the BIT between China and the United States and conclude the negotiation and implementation as soon as possible. Thirdly, China welcomes the United States to participate in jointly promoting the construction of the Belt and Road Initiative, the building of the Belt and Road initiative is not just a global public good, but also a common point for China-US cooperation.
In her speech, Chen Wenling disclosed the research on the next-generation trading method, the E International Trade, and proposed to accelerate the development of the E- international trade. She pointed out that if we can combine the US digital economy with the advantages of China's cross-border e-commerce, this will become the next-generation trading method. Furthermore, if consensus can be formed on the incremental approach between the two nations, they will have the opportunity to create more potential for cooperation.
The economic and trade cooperation between China and the United States has formed a pattern of interrelated interests and thus, fighting a trade war that is doomed to be without a winner is not in the fundamental interests of the US. President Trump knows this very well, which is why he said at the Davos Forum this year, that America First does not mean that the US wants to act alone. Yuan Youwei, Deputy Director of the Department of External Affairs of CCIEE, said that the walking alone might make the US develop faster in the short-term, but if the US is willing to cooperate with other countries, it will be able to achieve a further and stable development.