It is absolutely nonsensical to use bilateral deficits as the basis for judging trade performance, former U.S. Treasury Secretary Robert Rubin said Sunday at the China Development Forum Special Session held in Beijing.

He said that even if two countries had optimal trade policies, there would be imbalances in their bilateral trade because of differences in demand for goods and services.

"Furthermore, there is no question the Chinese are right in saying services should be included in measuring trade balance, not just goods," he added.

Rubin said the U.S. current account imbalance was determined by the relationship between investment and savings as well as all other affecting factors, rather than just any bilateral trade imbalance.

He also said trade wars enthusiastically espoused by some in the U.S. were usually counterproductive, but tariffs can be politically appealing. Tariffs have the appeal because relatively few of the electorate really understand a great deal about economic policy.

"There are people who are adversely affected by trade and even more today by technology," he said.

Rubin, also co-chairman emeritus of the U.S. Council on Foreign Relations, said a constructive Sino-U.S. relationship is vital to both countries, while an adversarial one could be so destructive.

He said what's imperative for a constructive relationship was that the two countries recognized two existential threats facing today's global community, namely nuclear weaponry and climate change, and exercise political, economic, and moral suasion to coalesce international activity around and in response to these threats.

He called the cooperation between China and the U.S. the best chance for the global community to avoid disaster, because no country, no matter how strong it may be, can deal with these transnational threats by itself and existing international institutions lack both the decision-making processes and the enforcement ability to be effective in that respect.

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