Trade ties are called unshakable
China, US can solve any disputes by talking, Commerce Ministry says
China and the United States can resolve any trade disputes through talks, since bilateral trade and economic cooperation have made the two countries inseparable, the Ministry of Commerce said ahead of US president-elect Donald Trump’s taking office on Friday.
Even though there are voices in the United States calling for protectionist trade measures or having a trade war with China, the two sides can work out new solutions, and bilateral ties won’t be shaken by such opinions, said Ministry of Commerce spokesman Sun Jiwen.
Bilateral trade volume amounted to $519.6 billion in 2016 — 211 times higher than in 1979. Two-way investment also notably surged, exceeding $170 billion by the end of last year, data from the ministry shows.
“The Chinese government is willing to work with the new US administration to generate more benefits for businesses and consumers on both sides,” said Sun.
Bilateral trade and investment created 2.6 million jobs in the US and contributed $216 billion to the US economy in 2015 alone, according to a report released earlier this month by the US-China Business Council.
The Chinese middle class will continue to grow over the next decade and will likely exceed the entire US population by 2026, the report said. Goods and service exports from the US to China are expected to reach $369 billion by 2026 and $520 billion by 2050, it added.
Jack Ma, executive chairman of Alibaba Group Holding, said at the World Economic Forum in Davos, Switzerland, that a trade war between the world’s two biggest economies would be a disaster for the global economy and he would do anything within his power to prevent it.
Ma said he would even sacrifice his company if that would prevent such a conflict.
Ren Hongbin, chairman of China National Machinery Industry Corp, known as Sinomach, said companies on both sides believe there are still opportunities.
“Sinomach has set goals to deepen ties with General Electric on a wind-power project in Africa after they put a pilot project into operation in Kenya in 2016,” said Ren.
Zhao Ping, director of the department of international trade research at the China Council for the Promotion of International Trade, said: “Rising frictions are normal . ... But this doesn’t mean that there will be an intensive trade war, as their economic and trade relations have become more interdependent.”
When asked to sum up relations with the US under President Barack Obama, who leaves office on Friday, Foreign Ministry spokeswoman Hua Chunying said on Thursday that “important progress” has been made on bilateral ties and the two countries should move forward as partners rather than competitors.
Some hawkish members of the Donald Trump team have repeatedly adopted war-like rhetoric about the incoming administration’s trade relations with China and other developing countries. They seem to want to send the message that other countries need the United States more than the other way round. But like many presumptuous war mongers in the past, they may not see the whole picture or understand history. The trade war warriors’ first miscalculation is not recognizing that the world is now vastly different from the 1980s, when Ronald Reagan, their role model, was US president.
Since then, according to the World Bank, the global total of merchandise exports has climbed more than eight times to almost $16.5 trillion in 2015.
Of this amount, the United States accounts for a little more than 9 percent. So its ability to mobilize enough war efforts against the largest exporter, which accounts for 13.8 percent, cannot but be limited.
Second, according to the World Trade Organization, although China is dependent on the US for 18 percent of its total exports, larger than the US is on China (7.7 percent), China’s global reach is more extensive.
Third, as a result of its economic transition that has been underway over the past few years, China is increasingly less dependent on the making of small daily commodities. It has grown to be a versatile manufacturer and, empowered by up to 7 million college graduates every year, is now producing some of the best machinery in the world.
More recently, China has also grown into a worldwide investor, and most importantly in large infrastructure projects and technologies.
Last but not the least, the new administration has promised that the US economy will create 25 million more jobs. Can Trump’s trade war lieutenants say what these new workers will produce and, more pertinently, to whom these products will be sold?
If the US is going to produce more, it will have to sell more, and it will have to sell more to the rest of the world. And one of the world’s largest, and most rapidly growing group, of consumers will be in developing countries such as China.
So trying to shut out China is unwise, because it is equivalent to shutting out some of the best opportunities that free trade can generate for an economy. All the trade war threat to China is just the bluffing of a paper tiger.