Equality and Mutual Benefit: The Only Solution to China-US Trade Disputes
Chinese Ambassador to Australia Cheng Jingye Published a Signed Article in The Australian
3 June 2019
Over the past several months, the trade disputes between China and the US, triggered by the latter, have made every country deeply anxious about the prospects of their own economy and that of the world.
Every time the US declared its intention to raise tariffs on Chinese goods, the financial markets of major economies would roil in succession, causing harm to many businesses and people.
What the US has done not only hurts the others but wounds itself as well. Some US economists estimated tariff hikes had cost US companies and consumers $US4.4 billion ($6.3bn) a month. This is the inevitable consequence of willful neglect of the rules of the market and of international trade.
A number of US industrial associations issued statements recently, railing against the US government raising tariffs on China and urging it to get the trade talks back on the right track as soon as possible.
What the US is doing also puts the global economy at risk. Many international institutions worry that if this bilateral dispute lingers on or escalates the global industrial and supply chains may tumble, cross-border investment and trade may suffer and world economic growth may dwindle.
The latest OECD economic outlook indicates that escalating China-US trade friction could cause a 0.7 per cent loss in global GDP from 2021 to 2022, which is nearly $US600bn.
The WTO has slashed global trade growth forecast for this year from 3.7 per cent to 2.6 per cent, the lowest for three years.
No economy could escape if such a slowdown in economic growth and trade takes place worldwide.
Trade between the world’s two biggest economies is not only important for China and the US but it is also influential for all other economies around the world. Bearing that in mind, China joined the trade talks with utmost sincerity and good will, aiming to resolve the differences with the US through proper negotiations.
Regrettably, the US resorted to maximum pressure during previous rounds of talks, insisted on staging a trade war unilaterally and indulged in bullying practices. In addition, the US side has been flip-flopping all along at the negotiation table, and kept slinging mud at China with fact distorting statements in the deadlock of the negotiations, in a bid to cover up its own faults.
The US has been widely criticized by the international community for provoking trade friction with China and imposing solutions by invoking the US domestic laws and bypassing the WTO dispute settlement mechanism.
Some economic experts called the current US trade policies an extension of the mercantilist policies in the 17th and 18th centuries, which by no means accord with the reality of economic globalization in the 21st century. Most people believe trade today is a matter of win-win cooperation instead of a zero-sum game.
A former director-general of an international trade organization expressed the view that international trade must be rule-based instead of power-based.
China is committed to resolving disagreement through dialogue and negotiation. But it must be done on the basis of mutual respect, equality and good faith. Any resolution should be mutually beneficial. China never succumbs to unreasonable demands that will do harm to its core interests and the legitimate rights of development. China does not want a trade war but will not dread fighting one. China has every confidence in fending off external disruptions and maintaining stable economic growth.
No matter where the China-US trade talks head to, China will continue to promote multilateralism, will advocate a rule-based multilateral trading system with the WTO at its core, support WTO reforms and will push forward the liberalization and facilitation of free trade and investment.
China will continue to take major steps, as the government announced recently, to promote comprehensive deepening of reforms and the opening up and expanding of market access for foreign investment. It will continue to strengthen international co-operation in intellectual property protection and to scale up the importation of goods and services.
China will continue to carry out economic and trade cooperation with other countries for mutual benefit, shared growth opportunities and common development and contribute to global growth by making the economic pie bigger.
China believes the China-US trade disputes can be resolved only through negotiations based on equality and mutual benefit, which will help to stabilize worldwide economic growth, safeguard the multilateral trading system and bring true benefits to all peoples around the world. China is willing to work with sustained efforts with the relevant stakeholders towards this end.
I suggest friends interested in this issue read a white paper released on June 2 by the Chinese government to get a thorough understanding of China’s Policies and Positions on Economic and Trade Consultations with the US.