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US Trade War Against China is unfair
2019/06/07

By Dr. Zhao Yongchen, Ambassador of the People’s Republic of China to Grenada

Since March 2018, the US government has been provoking trade disputes with China, placing high tariffs on Chinese exports. Recently, 25% more tariff was imposed on China’s $200 million of exports to the United States, and 60 China’s communications technology companies and affiliated companies, represented by Huawei were put on the sanctions list. The US government is engaged in malicious competition by completely banning Huawei, creating obstacles to economic and scientific cooperation and exchange between the two countries. Hence world outrage incurred. China is made as a scapegoat by the United States, for US increasingly serious economic and social inequality. It is extremely unfair. The United States must correct its mistakes in order to get the economic cooperation between the two major powers back to the right track and promote win-win cooperation.

First: The United States imposed high tariffs claiming excuses of China’s trade deficit with the United States, a total deviation from the market economic rules. Trumpeting "America First" , the current US administration raises its bets in the course of 11 rounds of negotiations with China, demanding China to meet its willful wishes. Irritated by refusal from China, the US made a big noise in the world, attacking China backing off promises, and quickly introduced administrative measures to impose high tariffs in an attempt to suppress China. This kind of bullying practice and style in the economic field is typical protectionism and unilateralism, a violation not only to the rules of World Trade Organization, but also to common practice of market economy.

Second, the US has gained huge profits from China’s import and export. No gratitude shown is quite immoral. For a long time, a large number of high-quality and low-priced goods has been exported from China to meet the needs of US consumers. The living standards of the American people has been greatly improved, and China also obtained corresponding labor income and remuneration. The most important fact is that China uses the foreign exchange generated by trade surplus to purchase large amounts of US Treasury bonds to help the US maintain ultra-high consumption. This is a win-win result. If the US does not buy Chinese goods, how can China achieve such a high trade surplus? If the United States is willing to sell high value-added goods to China, its trade deficit with China will not be so much. This is the product of the irrational system of the US trade structure, on which blame should be placed, along with its multinational corporations. The United States should solve its own problems by reforming trade economic structure, rather than inflaming fire of anger to China, not to say passing crisis on to other partners.

Third, the calculation of China-US import and export trade data is not objective and is seriously distorted. The US Department of Commerce announced that the trade deficit with China in 2018 was 621 billion U.S. dollars, but did not announce a trade surplus of 150 billion U.S. dollars in services. The United States also counted re-exported goods from Hong Kong and Taiwan originating from the mainland to the United State in the total profile of China’s exports, while The United States’ re-export to China through Hong Kong and Taiwan was not counted. This specially-oriented statistical standard on trade volume will inevitably lead to data distortion. The US government and the public’s blame on China on the grounds of distorted data holds no water.

Fourth, the United States imposes restrictions on high-tech and cutting-edge technology export to China, another discriminatory and unfair trade practice. The US has long been reluctant to sell goods with high added-value to China, setting limits on itself and reducing exports. This is a major source of the trade imbalance between the two countries. It is also a manifestation of discriminatory unequal trade. The United States should review its policy mistakes over the years rather than making useless effort to take China as excuse to mislead the people. In fact, as long as the United States pursues the belief of win-win cooperation, breaks trade barriers and restrictions, conducts trade and investment with China on an equal and fair basis, the trade imbalance can be solved through friendly consultations. This is not a big problem at all. Although fully aware of the cure for the disease, the United States, adopts a wrong prescription. Overdose will eventually become a poison, incurring harm to all parties.

Fifth, it is unfair for the US to turn a blind eye to China’s contribution to world consumption. Since the 1980s, the US has been promoting deindustrialisation, resulting in a large number of factories moving outside the US. This has caused the US to lose the capacity to produce enough goods for people’s daily life and it has to rely on imported goods to meet the needs. The 2008 world economic crisis triggered by the US financial crisis was just a result of the US economic bubble. Nowadays, the US real economy is shrinking, labor and manufacturing costs are increasing and the overall economy is slipping. This is the result of problems in the US economic structure. China is the world’s largest manufacturing country and the largest trading partner of 130 plus countries around the world. It provides the world with a wealth of industrial products that meet the material needs of countries all over the world, including the US. Thus, China’s huge contribution to the US consumption should be commended.

Sixth, as an important engine of the world economy, China contributes greatly to the world’s economic growth. In recent years, according to statistics from the International Monetary Fund and World Bank, China's contribution to the world economy has been around 30% per year. It has directly stimulated the economic development of China's trading partners and contributed a lot to their GDP growth, effectively promoting their economic prosperity. For instance, by exporting a large amount of energy minerals, Australia has maintained a mining boom of more than 20 years. The US-launched trade war not only hinders and disrupts China's economic development, but also directly harms the world's economic development and prosperity. This is the fault of the US.

Seventh, that the US administration accuses China of stealing advanced technologies is a vicious slander. It is an insult to the Chinese nation. Today, with the rapid development of science and technology, countries all over the world learn from each others by imitating, purchasing, merging, investing, digesting and absorbing. Only in this way can the human being develop new technologies step by step. This is not only the basic law of the development of science and technology, but also the basic law of innovation-driven economic development. The rapid development of science and technology in China today is the result of following the laws of the development of science and technology. According to the statistics from many international patent agencies, China’s quantity of patent applications and invention patent applications is among the top in the world. China is a big country in technological innovation, and China’s IPR protection system is becoming more and more sound. In fact, for example, China’s technology of 5G is leading far ahead of US, it is ridiculous to accuse China for stealing US technology.

Eighth, that the US administration accuses China of forcing technology transfer is not in line with the facts. Since reform and opening up in 1978, China has introduced a large number of preferential policies in foreign investment, land, taxation and labor to attract foreign direct investment. In order to open up the Chinese market and have a comparative advantage, some US companies choose to use technology as an investment to cooperate with Chinese partners. The US companies’ choice follows the rule of market. It is the result of free choice and a win-win outcome. If they didn’t choose to use technology as their capital stock, how could they get cooperation advantage and stand firm in the fierce market competition? If they were worried about forced technology transfer, they would have left Chinese market rather than cooperation within China for so many years. The US administration should not have that illusion that the US companies could make big money while being jealous of the technological progress of Chinese companies and gain great profit without any cost. If US takes irrational means to compete just because they failed in the Chinese market, it is not a long-term solution.

Ninth, the practice of US administration of using government power to suppress a technology company. It is an unfair competition. In order to stop China’s core technology development, the US administration used the power of the whole country to suppress Chinese high-tech company Huawei. The US administration first asked Canada to arrest and extradite Ms. Meng Wanzhou, CFO of Huawei, who did not violate any Canadian law, and then banned Huawei from entering the US market and banned US chip companies and related foreign enterprises from selling core telecommunications spare parts to Huawei. The US administration is trying to block and kill the world's largest companies in communications. This is part of the US administration’s attempt to contain China's high-tech development. More than that, the US administration has even asked China to stop the “Made in China 2025” national development strategy. Its direct motive and purpose is to prevent China from developing high-tech and challenging its core position as the world’s technology hegemony. All the US administration want is to prevent China from becoming the world number one economy. This is an extreme hegemonic act that uses unfair means to contain China’s development. How can the Chinese people say yes to such a hegemonic request?

Tenth, the United States is attempting to impose harsh and unequal treatment on China through extreme pressure. In China-US trade negotiations, the US organizes political conspiracy as well as exerting extreme pressure, like how they treated defeated countries after the Second World War, intending to defeat China totally and force China, the world’s second largest economy, to give up. Time can never return. American politicians who are still in their dreams of being the Cold War victory shall wake up. The only correct option for the US is to provide all countries, including China, with favorable treatment so as to attract investment, which helps support US economical growth. The US views the relationship between the major countries as a zero sum game designed to enhance its power and wealth, which is a dangerous precedent for international relationships. Now almost all of the US government leaders, congressmen and federal ministers accuse China, and negative publicity, vicious slanders and fake news are everywhere. Anti-Chinese forces, who are less aggressive during the grace period of China-US, now regard attacking China as “politically right”. Exaggerating problems in the threat to national security, creating hostile atmosphere and promoting vicious competition, ruin the relationship between China and the US, which seems that McCarthyism again revives and prevails in the US.

Eleventh, it is immoral for the US government to suppress the Chinese people's pursuit of national rejuvenation and prosperity. The overall goal and the original pursuit of Chinese Communists and government are to seek happiness for the Chinese people and rejuvenation for the Chinese nation. The Chinese Dream integrates national and personal aspirations, with the twin goals of reclaiming national pride and achieving personal well-being. It requires sustained economic growth, expanded equality and an infusion of cultural values to balance materialism.These are noble ideals and legitimate aims. Chinese people’s desire for a better life is sincere. It is sincere that China initiated to build a community with a shared future for mankind so as to achieve mutual beneficial cooperation with other countries. The US is deeply anxious and fearful of China's development and prosperity, by throwing out the so-called "Thucydides trap" and “the clash of civilizations” . The US tries to change the international trade rules and adopts Cold War approach set out a vicious competition against China. By doing this, the US has stood on the opposite side of China. The offense made to the of 1.4 billion Chinese people will cost inestimable lost to the US as well. The image of freedom, democracy, justice, equality, and the rule of law that the US has demonstrated before the Chinese people has collapsed totally. The Chinese people will never forget the history that China and US fought against the Japanese imperialism during World War II; however, we will never tolerate the reappearance of oppression of colonialism and imperialism in China.

China is a country with a history of 5,000 years of civilization ,ranking No. 1 in the world for 1,500 years before the 18th century. Having experienced countless storms and waves, overcome countless difficulties and obstacles, China still stands still in the East of the world. It is national rejuvenation of China that has a high probability, while there is very little likelihood for a backward tendency. In the short period of 40 years after China conducting the Reform and Opening Up, China has developed into the world's second largest economy, the world's largest industrial country, and the world's largest trading nation. It is believed that in next 30 years the Chinese people will continue to overcome all difficulties and obstacles, certainly be able to regain its status as a world power, and restore its historical status and international status. The international community should take the Chinese rejuvenation rationally and patiently, acknowledge the historical facts of China's rising up. It is the only right way for China and US to cooperate for a win-win situation, which is also a must solution to benefit the world.

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