China, US move to normalize trade
The US formally removed China’s designation as a currency manipulator, according to the US Treasury Department on Monday. This is obviously part of the phase one trade agreement between China and the US.
It was absurd for the US Treasury Department to list China a currency manipulator in August 2019 because China meets only one of the three indicators of a currency manipulator – having a significant bilateral trade surplus with the US. The short-term fluctuation of the yuan against the US dollar resulted from the US escalation of its trade war against China.
Listing China as a currency manipulator is against US law. The US used it as an unreasonable way to pressure China. Many organizations including the IMF believed China should not bear the stigma. The act damaged the
US reputation and showed the world how unreasonable the US could be.
But the US Treasury Department’s latest decision is still welcome. As China and the US are about to sign the phase one trade agreement, the US is becoming somewhat reasonable again. However, there is obviously no reason for China to feel grateful to the US. Many Chinese people and international observers may wonder if Washington will repeat the same tricks again if China and the US have disputes again in the future.
In the past two years, China had many reasons to be enraged by the unreasonable US pressure. But we have been seeking balance between maintaining our own interests and alleviating China-US disputes.
Such rationality from China needs to be supported by national strength.
The strength has offered Chinese people more confidence and calm. Over the past two years, China’s countermeasures against the trade war were not desperate resentment, but calm measures mingled with negotiations. The trade war and negotiations were combined into one.
China’s General Administrations of Customs announced on Tuesday that China’s foreign trade rose 3.4 percent in 2019, with its exports expanding 5 percent, although China-US trade declined by 10.7 percent. This shows that China is capable of withstanding the loss in its relations with the US. Such strength has helped China achieve the balance between firmly fighting the US and resolving disputes with it.
The decline of 10.7 percent in China-US trade seems to be a large number, but historically, it is not. Amid tensions, the US vented dissatisfaction against China. China-US antagonism was stopped in time by the phase one agreement. The two countries are likely to see a rebound in their trade in 2020.
The two countries are trying to get their trade relations back on track after a long detour. This will be a challenging task because the factors that triggered the trade war have not disappeared. So far, the losses caused by the trade war to both countries have been limited.
Chinese economy cannot be taken down. This is the basis for China and the US to jointly promote negotiations. In 2020, China must do its best to develop its economy, expand its domestic market and make sure that its economy is one of the most dynamic among the large economies. The prospect of China-US trade negotiations is largely in our own hands.