On July 20, the United States threatened
to impose tariffs on all US$500bn worth of Chinese imports. Earlier on
July 6, the US announced to impose 25 per cent tariffs on US$34bn worth
of Chinese goods. On July 11, the US further escalated by announcing a
tariff list of Chinese products worth US$200bn.
to impose tariffs on all US$500bn worth of Chinese imports. Earlier on
July 6, the US announced to impose 25 per cent tariffs on US$34bn worth
of Chinese goods. On July 11, the US further escalated by announcing a
tariff list of Chinese products worth US$200bn.
Where the trade war waged by the US against China is heading to, the world is wondering.
China’s position regarding the trade war
wilfully ignited by the US remains firm and clear. China doesn’t want a
trade war, but is not afraid of and will fight one when necessary.
Threats and intimidation will never work on China. China is capable of
and confident in safeguarding the interests of the Chinese people. The
US should be advised to remain calm and handle the relevant issue with a
rational attitude. Trade bullying will only backfire.
wilfully ignited by the US remains firm and clear. China doesn’t want a
trade war, but is not afraid of and will fight one when necessary.
Threats and intimidation will never work on China. China is capable of
and confident in safeguarding the interests of the Chinese people. The
US should be advised to remain calm and handle the relevant issue with a
rational attitude. Trade bullying will only backfire.
The main criticism that the US makes
against China centers around the trade deficit America runs with China.
However, when it comes to trade, imbalance does not mean unfairness as
the flow of trade is determined by the market. China has never
deliberately sought a trade surplus. Having a trade deficit does not
mean the U.S. is “losing”. It is an erroneous accusation that China has
been long engaging in unfair trade practices which have benefited itself
and shortchanged the United States.
against China centers around the trade deficit America runs with China.
However, when it comes to trade, imbalance does not mean unfairness as
the flow of trade is determined by the market. China has never
deliberately sought a trade surplus. Having a trade deficit does not
mean the U.S. is “losing”. It is an erroneous accusation that China has
been long engaging in unfair trade practices which have benefited itself
and shortchanged the United States.
Let me take the daily Apple here. When
an iPhone assembled in China arrives in the US, it is recorded as an
import at its factory cost of about US$240, which is added to the
US-China trade deficit by the US side. China, however, earns just about
US$8.46, or 3.6 per cent of the total factory cost or less than one per
cent of the value in terms of retail price in the transaction, while
most of the profits go straight to the coffers of Apple Inc. and
high-tech enterprises of other countries on relevant industrial supply
chains.
an iPhone assembled in China arrives in the US, it is recorded as an
import at its factory cost of about US$240, which is added to the
US-China trade deficit by the US side. China, however, earns just about
US$8.46, or 3.6 per cent of the total factory cost or less than one per
cent of the value in terms of retail price in the transaction, while
most of the profits go straight to the coffers of Apple Inc. and
high-tech enterprises of other countries on relevant industrial supply
chains.
Or take the Made-in-China suit. When
China exports a US$450 worth of business suit to the US, China gets five
per cent of the profit while the US gets 84 per cent.
China exports a US$450 worth of business suit to the US, China gets five
per cent of the profit while the US gets 84 per cent.
Can these figures be cited to prove that
the US is shortchanged in its trade deals with China and China is
playing a zero-sum game here with the US?
the US is shortchanged in its trade deals with China and China is
playing a zero-sum game here with the US?
The main reasons for the deficits do not
lie on the Chinese side. Generally, they result from how resources are
allocated in an interconnected global economy and are natural
reflections of the global value chain and international division of
labour. In particular, there are certain factors inevitably lead to
trade deficits. The savings rate in the US remains too low while
consumption rate remains too high. The US dollar serves as the
international reserve currency. And, the US government imposes
restrictions on high-tech exports to China.
lie on the Chinese side. Generally, they result from how resources are
allocated in an interconnected global economy and are natural
reflections of the global value chain and international division of
labour. In particular, there are certain factors inevitably lead to
trade deficits. The savings rate in the US remains too low while
consumption rate remains too high. The US dollar serves as the
international reserve currency. And, the US government imposes
restrictions on high-tech exports to China.
The United States has further accused
China of the so-called “theft of intellectual property” and “forced
technology transfer,” charges which are neither fair nor objective.
China of the so-called “theft of intellectual property” and “forced
technology transfer,” charges which are neither fair nor objective.
The Chinese government has codified a
robust IPR protection legal system, including setting up IPR courts and
dedicated tribunals that enhance the dominant role of the judiciary in
IPR protection. Meanwhile, in 2017, the intellectual property royalties
paid by China reached US$28.6bn, a 15-fold increase from 2001 when it
joined the World Trade Organisation, running a deficit of more than
US$20bn. US$7.13bn went to the US with a yearly increase of 14 per cent.
More importantly, China is emerging as a leader in global innovation
and brand-building. According to the latest Global Innovation Index
(GII) released by the World Intellectual Property Organisation, China
has been the only mid-income economy on the list of the world’s 20 most
innovative economies. The growth miracle of China’s economic development
has never been achieved by stealing from anyone, and never will be.
robust IPR protection legal system, including setting up IPR courts and
dedicated tribunals that enhance the dominant role of the judiciary in
IPR protection. Meanwhile, in 2017, the intellectual property royalties
paid by China reached US$28.6bn, a 15-fold increase from 2001 when it
joined the World Trade Organisation, running a deficit of more than
US$20bn. US$7.13bn went to the US with a yearly increase of 14 per cent.
More importantly, China is emerging as a leader in global innovation
and brand-building. According to the latest Global Innovation Index
(GII) released by the World Intellectual Property Organisation, China
has been the only mid-income economy on the list of the world’s 20 most
innovative economies. The growth miracle of China’s economic development
has never been achieved by stealing from anyone, and never will be.
The accusation of “forced technology
transfer” is also pointless and groundless. China does not have laws and
policies that compel foreign companies to transfer technology to
Chinese companies when investing in China. When it comes to technology
or any other cooperation between Chinese and foreign companies, it is
purely a matter of voluntary contracts. One is willing to buy, and the
other is willing to sell, which is mutually beneficial.
transfer” is also pointless and groundless. China does not have laws and
policies that compel foreign companies to transfer technology to
Chinese companies when investing in China. When it comes to technology
or any other cooperation between Chinese and foreign companies, it is
purely a matter of voluntary contracts. One is willing to buy, and the
other is willing to sell, which is mutually beneficial.
In the world of today, all countries
have been economically integrated into the global industrial and value
chain to varying degrees. Fourty per cent of China’s commodity exports
and two thirds of its high-tech exports are manufactured by foreign
enterprises in China. We are all interdependent and our interests are
closely intertwined. Clinging to the outdated zero-sum game mindset and
willfully provoking a trade war will harm the interests of not only the
two parties involved but also all other parties in the global industrial
chain. It will produce no winners.
have been economically integrated into the global industrial and value
chain to varying degrees. Fourty per cent of China’s commodity exports
and two thirds of its high-tech exports are manufactured by foreign
enterprises in China. We are all interdependent and our interests are
closely intertwined. Clinging to the outdated zero-sum game mindset and
willfully provoking a trade war will harm the interests of not only the
two parties involved but also all other parties in the global industrial
chain. It will produce no winners.
By launching a trade war not only with
China, but also with the world, the United States is dragging the world
economy into a treacherous zone. The trade war dampens the growth
momentum of global trade. The trade war shakes everyone’s confidence in
the world economy. The trade war jeopardises the well-being of all
mankind. Last but not least, initiating a trade war to serve domestic
political needs and selfish interests is a typical act of unilateralism
and zero-sum game. It marks a full-blown regression of international
rules and global governance since the end of the Second World War,
which, if unchecked, will cut so deep to the world economy that
everybody should be alarmed by this. The US is firing at the whole world
as well as itself, and will only end up hurting itself and the world.
China, but also with the world, the United States is dragging the world
economy into a treacherous zone. The trade war dampens the growth
momentum of global trade. The trade war shakes everyone’s confidence in
the world economy. The trade war jeopardises the well-being of all
mankind. Last but not least, initiating a trade war to serve domestic
political needs and selfish interests is a typical act of unilateralism
and zero-sum game. It marks a full-blown regression of international
rules and global governance since the end of the Second World War,
which, if unchecked, will cut so deep to the world economy that
everybody should be alarmed by this. The US is firing at the whole world
as well as itself, and will only end up hurting itself and the world.
President of the European Council,
Donald Tusk, who just wrapped up the 20th China-EU Summit in Beijing,
said in June that the rules-based international system is under threat,
and to everyone’s surprise, the threat comes from no one but the US who
built up this system. Many prominent international economists including
President Adam Posen of the US Peterson Institute for International
Economics also publicly said that today’s US government constitutes the
biggest threat to the current world economic order.
Donald Tusk, who just wrapped up the 20th China-EU Summit in Beijing,
said in June that the rules-based international system is under threat,
and to everyone’s surprise, the threat comes from no one but the US who
built up this system. Many prominent international economists including
President Adam Posen of the US Peterson Institute for International
Economics also publicly said that today’s US government constitutes the
biggest threat to the current world economic order.
China has never imposed unilateral
measures on others, nor has it acted against the basics of the WTO,
namely free and open trade, non-discrimination, tariff constraints and
special and differential treatment, and China has not the slightest
intention of doing these things in the future.
measures on others, nor has it acted against the basics of the WTO,
namely free and open trade, non-discrimination, tariff constraints and
special and differential treatment, and China has not the slightest
intention of doing these things in the future.
Openness brings progress. China will
continue to press ahead with trade reform and opening up its markets,
and work with the rest of the world to uphold free trade and the
multilateral trading system. President Xi Jinping announced four major
initiatives to further open the Chinese market at the Boao Forum for
Asia Annual Conference in April. Subsequently, the Chinese government
introduced specific measures, including drastically reducing tariffs on a
range of imported goods. Tariffs on 1,500 types of consumer goods have
been lowered considerably. The import tariff on automobiles has been cut
from 25 per cent to 15 per cent. The revised negative list for foreign
investment released late June substantially eased market access
restrictions for foreign investors. In November, China will host the
ever first China International Import Expo in Shanghai. China will only
become more and more open.
continue to press ahead with trade reform and opening up its markets,
and work with the rest of the world to uphold free trade and the
multilateral trading system. President Xi Jinping announced four major
initiatives to further open the Chinese market at the Boao Forum for
Asia Annual Conference in April. Subsequently, the Chinese government
introduced specific measures, including drastically reducing tariffs on a
range of imported goods. Tariffs on 1,500 types of consumer goods have
been lowered considerably. The import tariff on automobiles has been cut
from 25 per cent to 15 per cent. The revised negative list for foreign
investment released late June substantially eased market access
restrictions for foreign investors. In November, China will host the
ever first China International Import Expo in Shanghai. China will only
become more and more open.
China is willing to work together with
Nigeria to further open our respective markets to each other, uphold the
multilateral trading system and oppose acts of unilateralism, in a bid
to safeguard the common interests of human development and prosperity.
Nigeria to further open our respective markets to each other, uphold the
multilateral trading system and oppose acts of unilateralism, in a bid
to safeguard the common interests of human development and prosperity.
culled:Punch
