Whither Sino-American economic relations?

By George N. Tzogopoulos
0 Comment(s)Print E-mail China.org.cn, June 27, 2019
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Flags of China and U.S. [Photo/VCG]

A few days ago, Chinese President Xi Jinping and his American counterpart Donald Trump held a telephone conversation. The two leaders, expected to meet on the sidelines of the G20 Summit in Osaka on June 28-29, are making efforts to create a modus vivendi amid current trade tensions. 

President Trump confirmed the meeting in a recent tweet in which he characterized their conversation as "good." So, does this tweet generate some optimism? Perhaps yes; however, a rather more cautious stance seems wiser.  

At the beginning of June, China's State Council Information Office issued a White Paper that in part outlines three different American "backtrackings" in the bilateral trade consultations. "The more the U.S. government is offered, the more it wants," it declares. 

Thus, it's particularly hard to understand how President Trump can be so positive. However, domestic pressure on him is rising. A look at the content of American publications is indicative. They do extensively report on the serious concerns expressed by senators of both parties as well as businessmen about the consequences of the trade war to the national economy. 

The personality of President Trump does regularly overshadow the content of delicate negotiations. Sino-American disagreements are nothing new. The evolution of bilateral relations since their normalization in the 1970s has been marked by difficult endeavors to find common ground not only on trade but also on foreign policy and security. 

Valuing continuity and forging a new type of major-country relationship, China believes dialogue is the best means of resolving differences. Traditional Chinese diplomacy goes hand-in-hand with patient endeavors to manage differences before a potential crisis breaks out. As Confucius once said: "Gentlemen seek harmony but not uniformity."

President Trump decided to start a trade war against China ignoring warnings by most economists. Before his administration began, such an idea had been publicly discussed but generally rejected in the U.S. 

As long ago as 2005, in a "Foreign Affairs" essay, Neil Hughes analyzed the possibility of a trade war and encouraged the two sides "to respect difference and look for common ground in resolving disputes." Hughes also downplayed the argument of Chinese unfair trade practices, explaining most Chinese exports to the U.S. were produced by foreign firms, many of them American. 

By waging trade war against China, President Trump has taken three risks. The first is related to the damage his policy is causing to the American economy that can only be partly and temporarily healed via state subsidies. Although the decoupling scenario might satisfy public opinion, it is unsustainable. 

The second concerns the continuous alienation of his country from its traditional economic partners at the world economic level, such as the European Union and Japan. The Sino-American trade war does not stop with the U.S. or China, but affects the entire world economy. 

The third risk is to, at least indirectly, give prominence to China's role as a guarantor of globalization and stability in the world economic system. 

China's State Council Information Office issued a white paper to provide a comprehensive picture of the China-U.S. economic and trade consultations, and present China's policy position on these consultations on June 2, 2019. [Photo/Xinhua]

The continuation of the trade war is also not in the interest of China. The recently issued White Paper clarifies this position, but also mirrors the confidence of the Chinese government in being to fight hard and ultimately win. 

Under the leadership of President Xi, China is clearly evolving into a robust country that can overcome problems by counting on hard-work, self-reliance, innovative research and careful study. As already mentioned, the management of differences with the U.S. was a priority for Beijing before the Trump years and remains so today. 

The current method of President Trump requires immediate answers and solutions to long-standing differences, which is no easy task. And it is not only the U.S. that is raising demands. 

An issue regularly ignored in the Western public discourse is Chinese disappointment with ongoing protectionism in the American market. There are always two sides to every story. China's concessions in the interest of world economic calmness do therefore have some limits.

It is hoped the end of the meeting between Xi Jinping and Donald Trump in Osaka will be accompanied by white smoke. Looking at Sino-American economic relations in retrospect, progress and cooperation have always prevailed over stagnation and rivalry. 

George N. Tzogopoulos is a columnist with China.org.cn. For more information please visit:


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