China Needs Confidence and Resolve in Face of Trade War

By Wang Xiaohui

A trade war against China was launched by the United States on the day the 2018 World Cup kicked off, as the Chinese people prepared to celebrate the Dragon Boat Festival, a thousand-year-long tradition commemorating Qu Yuan, the patriot poet of the Warring States period (475 BC-221 BC).

Trade ties between the two countries have remained unclear and strained since August of last year, when Washington unilaterally started a Section 301 investigation into the alleged Chinese intellectual property and technology transfer practices.

Trade tensions between the world’s two major powers then escalated once more on June 15 with the White House’s announcement to impose an additional 25 percent tariff on Chinese goods worth approximately US$50 billion. China hit back on the next day by unveiling a list of U.S. products that will be subject to additional tariffs.

On June 18, the White House made another statement, threatening tariffs on another US$200 billion of Chinese products. In response, the Chinese ministry of commerce said on June 19 that if the United States loses its rationality and unveils another list of Chinese products for additional tariffs, China will have no choice but to take comprehensive measures combining quantitative and qualitative ones to resolutely strike back. A trade war seems to be imminent.

What will Happen will Happen

Recent media reports have frequently expressed the sentiments, “No one wins a trade war” and “To kill 1,000 of one’s enemy costs the lives of 800 of one’s own men.”

Is such a plain truth incomprehensible to President Donald Trump and his advisors? Surely not. Washington is fully aware of the damage it will suffer and is willing to pay the cost, because it is more concerned with the damage the war will inflict on China.

The Trump administration’s apparently inconsistent attitude is only a tactic. Its strategy has never changed. It is determined to use the trade war and any other approach it can to impede China’s progress. China must be clear about this.

If we look back on the past decades, we will draw a clearer picture of the situation. American hostility towards China has profound historical roots. It is the result of differences between the social systems of the two countries.

Washington’s attitude towards China has never changed. We can feel this hostility from the Truman Doctrine, to President Nixon’s book “1999: Victory Without War,” to Secretary of State Madeleine Albright’s hailing of the internet as a way of opening up China to foreign ideas, to all the actions of the Trump administration. The only difference between Trump and them is that the businessman-turned president doesn’t use the conventional approaches of politicians, and that his overly flamboyant gestures leave the rest of the world flummoxed.

Be Prepared for a Protracted War

The trade conflict between China and the United States is a long-term problem caused by the respective economic structures of the two countries. It is impossible to solve it in the short run. On June 15, Trump explained his decision to impose the tariff. The gist of his idea was that the bilateral trade between the United States and China has been unbalanced, and it is unfair that the United States has suffered a deficit, while China has seen a surplus. The allegation that bilateral trade remains unbalanced is true, but this can’t be taken as an unfair outcome.

The cause of the current situation is complicated. Indeed, some sectors in China need to open wider, and state-owned enterprises need to improve their business modes. But the more important cause of the problem is the difference between the two countries’ economic structures, the role of the U.S. dollar as a global currency, the American lifestyle featuring low deposits and high consumption and the U.S. export restriction on high-tech products to China, amid other systemic issues.

Taking the U.S. dollar’s role as an example, in the 1970s the United States managed to make the dollar a global currency, which led to an enormous profit gain. However, to maintain the dollar’s position, the United States must dispense its currency extensively worldwide, which has led to trade deficits. The logic is simple. Washington is fully aware of this fact. It has just conveniently forgotten to mention it.

Since it is impossible to solve the trade imbalance between China and the United States in the short term, trade conflicts and even trade wars will occur frequently in the future. In view of this fact, we should be prepared for a protracted war.

Challenges on the Road to Development

When pursuing development, smooth sailing is not the norm.

Although China grew rapidly in the first two decades of its reform and opening-up policy, it still fell far behind Western countries, particularly the United States. Since its entry to the World Trade Organization in 2001, China has seized opportunities to globalize, opening wider and integrating into the international community. It became the world’s second-largest economy in 2010.

Since the 18th National Congress of the Communist Party of China (CPC) in 2012, China has intensified its efforts to promote progress in the economy, military, culture, science and technology, as well as social governance. The share of China’s GDP in the global economy has grown to roughly 15 percent, up from 11 percent. The Chinese government has set the goal of transitioning the country’s economy from a rapid growth phase to one of high-quality development.

All those achievements are the fruits of the hard work of more than 1.3 billion Chinese people under the leadership of the CPC. However, hegemonic powers wedded to Cold War mentality use them as pretexts to fan the so-called “China threat” and to attempt to contain China’s development.

After World War II, the United States gained the leadership of the world. And after the dissolution of the Soviet Union, it became “the sole remaining superpower.” By wielding its political, military, economic and ideological influence, the United States managed to do almost whatever it liked.

This has encouraged its egocentrism and intolerance of win-win outcomes. The trade war it has waged against China is just part of its scheme to contain China’s development.

China has been committed to peaceful development, with no intention to be in conflict with any country. Over the past few months, we have been working to resolve the problem through negotiation.

However, as an old Chinese saying goes, “The trees may prefer calm but the wind will not subside.” When someone declares a trade war against China, we have no other choice but to respond.

Maintaining Confidence and Resolve

Mao Zedong wrote in a poem, “Complaining too much damages health, and one should have a far-sighted view of life.” Deng Xiaoping remarked, “Development is of overriding importance.” Xi Jinping observed, “A top priority for China is to manage our own affairs.” These are good examples of the open-mindedness and great vision of Chinese leaders.

In pursuing its own interests, the United States has even fired shots at the European Union (EU) and Canada, which have been its allies for many years. How can we expect it to be fair on China? In the course of development, China will undoubtedly be confronted with various challenges, but we must not complain, knowing that with confidence and resolve we can achieve our goals.

First, we will further our reform and opening-up policies, improve our economic structure, upgrade our investment and trade environment, enhance our cooperation with the EU, Japan, South Korea, the ASEAN and African countries, and enlarge our partnerships to cushion the adverse impacts of the trade war.

Second, we will promote the implementation of the Belt and Road Initiative and increase economic and cultural cooperation with the countries along its routes to expand China’s space for development.

Third, we will keep a clear head and become more aware of our weaknesses in technological innovation, core technologies and high-end manufacturing. We will increase spending on technological research and development as well as education, with a firm commitment to enhancing China’s strength in science and technology.

Fourth, we will maintain strategic resolve. While safeguarding our national interests, we will uphold a broad vision for Sino-U.S. relations, and will try to keep the trade war at bay.

This year marks the 40th anniversary of China’s reform and opening-up. The country has reached a new starting point and will meet new challenges with unswerving confidence.

Source: China.org.cn

The author Wang Xiaohui is editor-in-chief of China.org.cn

Opinion articles reflect the views of their authors, not necessarily those of China Focus