China US trade war

The United States is an important driving force for China’s accelerated reform. However, if the China-U.S. Negotiations are blocked again, the United States, which launched a trade war in order to obtain more “concessions” from China, may not receive more dividends from China than other countries in the world.

According to the December 23 report of the state-run Xinhua News Agency, “In order to implement the spirit of the 19th National Congress of the CPC and the 2nd, 3rd and 4th Plenary Sessions of the 19th CPC Central Committee and the Central Economic Work Conference, promote high-quality trade development”, “actively Expanding imports, stimulating import potential, and optimizing the import structure “, with the approval of the State Council, China will implement a tentative import tax rate for more than 850 commodities below the MFN tariff rate from January 1, 2020.

The Office of the Customs Tariff Commission of the State Council stated that the adjustment of these measures will “conducive to reducing import costs, promote the flow of international and domestic factors, and promote the establishment of a new system of higher-level open economy; it will help increase the level of opening up, expand new space for trade development, and accelerate The construction of high-standard free trade zones is conducive to sharing development results with other countries and regions, and creating a new situation in international trade that is open to cooperation, inclusive and inclusive, and sharing a win-win situation. “

In addition to these official statements, Western media such as the New York Times, Bloomberg News, and the Guardian have a more direct view: China ’s move is to “cut off” from Trump ’s protectionist behavior. China is We must prove our commitment to reform and opening up at the stall of the China-US trade war, and so on.

However, these are all “face” efforts. The practical significance of China ’s move is exactly as many media have mentioned, in order to respond to the growing demand of Chinese companies and citizens for imported goods, and more importantly, to improve the market through only opening up. The competitiveness of Chinese companies and the degree of transparency in market modernization have crossed the bottleneck of China’s economic development and have not fallen into the “middle-income country trap.”

China Capital Market “Year of Reform”

Since this year, everyone has seen negotiations between China and the United States, but in fact a lot of things have happened in the Chinese capital market: the Shanghai-London Stock Connect between the Shanghai Stock Exchange and the London Exchange has been launched, and the China-Japan ETF (trading-type open) Exchange of index funds), expanding the range of specific products in the futures market, removing restrictions on foreign ownership of securities, funds and futures companies in advance, implementing the “full circulation” reform of Hong Kong stocks, further revising QFII (qualified foreign institutional investors), RQFII ( The rules and regulations of RMB qualified foreign investors) are examples.

In the past year, from easing institutional access and loosening business restrictions to expanding the opening of financial markets, attracting foreign investors to participate, and strengthening interconnection with overseas markets, the Chinese economy is represented by capital market reforms and is undergoing comprehensive and deepening reforms, while accelerating Opening pace.

In the face of these open reform measures, many Western media’s first response was “this is China’s action as a result of the trade war.” This judgment is neither right nor right.

This is correct because the current economic and political policies of the current U.S. government, coupled with the weakness of the major economies, have led to the rise of protectionism. China must try to change this situation.

What is wrong is that China’s adoption of these open reforms is an established arrangement for the country’s economic development, as set out in black and white, and China’s gradual opening up of its markets to the world has been a process that has not stopped for decades.

China’s “reform and opening up” is far from over

In October 2019, the communique of the Fourth Plenary Session of the 19th Central Committee of the Communist Party of China stated that it is necessary to “improve the overall diplomatic layout, promote the establishment of an open system of cooperation and win-win cooperation, and actively participate in the reform and construction of the global governance system.” In December 2019, the communiqué of the annual central economic work conference stated that “we must be good at reforming to remove the institutional and institutional obstacles to development, activate the dormant development potential, and allow various market players to be at the forefront of technological innovation and domestic and international market competition. Fight hard. ” In the fifth item, “Efforts to Promote High-Quality Development,” which concerns six points of economic work in 2020, it specifically stated that “the two wheels of innovation-driven and reform and opening-up will comprehensively improve the overall competitiveness of the economy and accelerate the construction of a modern economic system.” “Improve the system and mechanism, build a group of advanced manufacturing clusters with international competitiveness, and improve the basic capabilities of the industry and the modernization of the industrial chain.”

Some remarks hold that “Although China has been open a lot, it is still very closed compared to other countries.” This is not the case. China has been one of the world’s 25 largest foreign direct investment markets since 1998, and it is one of only two developing countries among them. Among the BRICS countries (BRICS: Brazil, Russia, India, China, and South Africa), China has been rated as the most open and competitive economy to the financial services giant Credit Suisse A report was released in 2015 comparing the non-tariff barriers imposed on foreign goods between 1990 and 2013. Among them, the United States far exceeded other countries with nearly 450 cases, followed by India and Russia, and China ranked fifth. Barriers are only one-third of those in the United States. This situation has not changed much in recent years.

As far as matters are concerned, China’s reform and opening up still has a long way to go. People should not have any unrealistically high expectations of the degree of opening up of the Chinese market, nor should they disregard the facts and blame its stagnation. It can be predicted that Beijing will always determine the degree of opening up in the next stage based on its assessment of the actual development of the Chinese economy.

This also means that the adjustment of these import measures, which will be implemented on January 1, can actually be regarded as a step-by-step link in the “reform and opening up” platform of the Chinese government for 40 years.

In this process, what role has the current US government’s “trade war” approach played?

The United States is the driving force for China’s reform as soon as possible

There is no doubt that pressure from the US government has played a positive role in China’s economic reforms and has accelerated the implementation of reform measures.

This is because, in order to maintain the stability of China-US relations, Beijing needs to “forbear, ease, and give way.” Tolerate the change in the current U.S. government and wanton accusations, slowing down the possibility of more intense conflicts, and giving Trump the face-saving projects such as “China purchases tens of billions of US agricultural products” .

Along this line of thinking, will Beijing “accelerate the reform that was originally planned to be completed in five years and complete it in three years?” I believe it will. But the premise must be to ensure that the Chinese economy is sufficiently bearable, and that the reform is in line with the established development direction.

On the other hand, the reason why the US government’s approach has accelerated Beijing’s implementation of reform measures is precisely because the US government’s approach has changed the external environment facing China. The White House ’s launch of a global trade war has led to the rise of conservatism globally. It has also led many US political and economic partners to seek diversification policies and reduce dependence on the United States. This means that Beijing has more reforms to The need to cope with changes in the general environment and “active and active” to seize the opportunity of further intertwining with other countries-so we will also see the adjustment measures on January 1.

Changes in negotiations will only hinder U.S. dividends

Because of this, the dividends received by the current US government by launching a “trade war” with China are really limited. The fundamental factor that determines the speed of China’s opening up is China’s own development stage and economic stability. Therefore, other countries have not launched a “trade war” with China, and they have still received the “hard work” bonus from the United States.

In fact, this approach not only won’t earn extra dividends, but will also have counter-effects: According to the data of the first 11 months of 2019 released by the General Administration of Customs of China on December 8, the total value of China’s import and export of goods trade is 285,000 100 million yuan, an increase of 2.4% over the same period last year. Among them, exports were 15.55 trillion yuan, an increase of 4.5%; imports were 12.95 trillion yuan, which was basically the same as the same period last year; the trade surplus expanded by 34.9%. The top three major trading partners accounted for 41.3% of total trade, of which China-EU trade value was 4.4 trillion yuan, an increase of 7.7%; China-ASEAN trade value was 3.98 trillion yuan, an increase of 12.7%; and the total value of China-US trade was 3.4 trillion yuan, down 11.1%.

Therefore, if China-U.S. Negotiations are blocked again, the United States may not receive more dividends from China than the rest of the world through “Maximum Pressure and Engagement” (Trump’s signature negotiation method).

According to this situation, we can even look forward to predicting that China’s own reform and opening up process will not stop, and if the process of China-US trade negotiations is blocked, the United States will launch a tariff or import and export ban. As a result, China ’s open trade policy to the world is therefore not implemented in the United States.

If this is really the case, even though the trade war has promoted China’s reforms, it has failed to improve the interests of American companies and American nationals. Is this a waste of effort and harm to others?

 

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