Trade war would hurt ev­ery­one, Bei­jing says

Trade: Move to up­end good foun­da­tion ‘un­wise’

China Daily (Hong Kong) - - FRONT PAGE - By WANG YANFEI wangyan­fei@chi­nadaily.com.cn

China hopes there will not be a trade war with the United States, which would harm not only the in­ter­ests of the world’s two big­gest economies, but that of the whole world, Vice-Min­is­ter of Fi­nance Zhu Guangyao said.

But while it sticks to “non­con­flict, non­con­fronta­tion, mu­tual re­spect and win-win” bi­lat­eral trade prin­ci­ples, Bei­jing will stead­fastly safe­guard its core in­ter­ests, such as sovereignty, he said at a fo­rum on Satur­day held by the China Cen­ter for In­ter­na­tional Eco­nomic Ex­changes, a gov­ern­ment think tank.

Zhu high­lighted the im­por­tance of en­hanc­ing com­mu­ni­ca­tion amid pos­si­ble fu­ture trade ten­sions be­tween the two ma­jor global trade play­ers.

“Non­con­fronta­tional co­op­er­a­tion is the only right choice when ad­dress­ing bi­lat­eral trade con­flicts. The two coun­tries should rec­og­nize their shared in­ter­ests and should give up any zero sum strat­egy.

“A trade war would do more harm than good for both coun­tries, and China hopes it does not hap­pen,” he said.

Zhu cited a study by the US-based Peter­son In­sti­tute for In­ter­na­tional Eco­nom­ics in Septem­ber, say­ing that if high tar­iffs were to be im­posed by pres­i­dent-elect Don­ald Trump, it would “plunge the US econ­omy into re­ces­sion and cost more than 4 mil­lion pri­vate sec­tor Amer­i­can jobs”.

Zhu’s re­marks came amid ris­ing trade ten­sions be­tween the two coun­tries, with Trump’s prom­ise to pur­sue pro­tec­tion­ist poli­cies tend­ing to par­a­lyze bi­lat­eral com­merce and trig­ger ten­sions. Trump’s in­au­gu­ra­tion is Jan 20.

China and the US ac­count for about 40 per­cent of the world econ­omy and 20 per­cent of global trade. They have reached a bet­ter un­der­stand­ing on trade and in­vest­ment is­sues via an an­nual di­a­logue, but dif­fer­ences re­main, es­pe­cially in ar­eas like in­tel­lec­tual prop­erty rights, anti-dump­ing, trade deficits and the yuan.

Trump has pledged to la­bel China as a cur­rency ma­nip­u­la­tor and im­pose a 45 per­cent tar­iff on Chi­nese ex­ports to the United States.

“China would prop­erly ad­dress fric­tions first by ne­go­ti­a­tions, and then by go­ing through con­sul­ta­tion pro­ce­dures un­der the World Trade Or­ga­ni­za­tion if a trade war oc­curs,” Zhu said.

Zhu said the two na­tions could reach a high-level in­vest­ment agree­ment that would be mu­tu­ally ben­e­fi­cial, fol­low­ing years of re­mark­able in­creases in bi­lat­eral trade vol­ume.

Trade be­tween China and the US reached $558.4 bil­lion in 2015, 228 times greater than the level in 1979, at the dawn of China’s re­form and openingup era.

Zhang Xiao­qiang, vice-chair­man of the gov­ern­ment think tank, said that China would

con­tinue its open­ing-up pol­icy as it plays a greater role in en­hanc­ing eco­nomic ex­changes through re­gional pro­grams, such as the Belt and Road Ini­tia­tive and the Asian In­fra­struc­ture In­vest­ment Bank.

Robert Hor­mats, vice-chair­man of the Kissinger As­so­ci­ates con­sult­ing firm and former US un­der sec­re­tary of state for eco­nomic growth, en­ergy and the en­vi­ron­ment, told China Daily that the US made a mis­take not join­ing the AIIB. He also said it would be un­wise for Trump’s ad­min­is­tra­tion to up­end a good foun­da­tion for re­la­tions that has been care­fully nur­tured for many years.

“There should be thought­ful con­sid­er­a­tion and at least an at­tempt to work out dif­fer­ences,” he said. Hor­mats sug­gested the Trump ad­min­is­tra­tion “take time” be­fore mak­ing a pol­icy shift in sig­nif­i­cant ar­eas such as trade.

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