On 24th September 2018, the Information Office of the State Council of the People’s Republic of China published a White Paper, thoroughly stating the facts of the China-US trade friction and China’s position on it.
The White Paper pointed out that China is the world’s biggest developing country while the United States is the biggest developed country. Trade and economic relations between China and the US are of great significance for the two countries as well as for the stability and development of the world economy.
Since the establishment of diplomatic relations, bilateral trade and economic ties between China and the US have developed steadily. A close partnership has been forged under which interests of the two countries have become closer and wider. Both countries have benefited from this partnership as has the rest of the world. Since the beginning of the new century in particular, alongside rapid progress in economic globalization, China and the US have observed bilateral treaties and multilateral rules such as the WTO rules, and economic and trade relations have grown deeper and wider. Based on their comparative strengths and the choices of the market, the two countries have built up a mutually beneficial relationship featuring structural synergy and convergence of interests.
China and the US are important partners for each other in trade in goods. Two-way trade in goods has grown rapidly. Chinese statistics show that trade in goods between China and the US in 2017 amounted to US$583.7 billion, a 233-fold increase from 1979 when the two countries forged diplomatic ties, as well as a seven-fold increase from 2001 when China joined the World Trade Organization. Currently, the US is China’s biggest export market and sixth biggest source of imports. In 2017, the US took 19 per cent of China’s exports and provided 8 per cent of China’s imports. China is the fastest growing export market for US goods and the biggest source of imports of the United States. In 2017, 8 per cent of US exports went to China. US exports to China are growing much faster than its global average. China is an import market for US goods such as airplanes, agricultural produce, automobiles, and integrated circuits. China-US bilateral trade has a strong complementarity.
Bilateral trade in services is developing quickly.
The US has a highly advanced and fully fledged service industry which is very competitive on the international market. The US is the biggest source of China’s deficit in services trade and this deficit has been increasing quickly. China’s trade deficit with the US in tourism continues to widen. China’s payments for the use of US intellectual property continues to rise.
China and the US are important investment partners.
The US is a major source of foreign investment for China. By the end of 2017, there were approximately 68,000 US-funded enterprises in China with over US$83 billion in actualized investment. With a rapid increase in direct investment by Chinese enterprises in the US, the latter has become an important destination for Chinese investment. By the end of 2017, the stock of Chinese direct investment in the US amounted to approximately US$67 billion. Meanwhile, China has also made a significant financial investment in the US.
China and the US have both benefited markedly from trade and economic cooperation.
China-US trade and economic cooperation has promoted economic development in China and improved economic well-being. Trade and economic cooperation has supported US economic growth and lowered US inflation, created a large number of jobs in the US, brought real benefits to American consumers, created a large number of business opportunities and significant profits for American businesses and promoted industrial upgrading of the US.
In general, China-US trade and economic cooperation is a win-win relationship and by no means a zero-sum game, bringing concrete benefits to US companies and people.
The White Paper stressed that China and the US are at different stages of development. They have different economic systems. Therefore, some level of trade friction is only natural. The key, however, lies in how to enhance mutual trust, promote cooperation, and manage differences. In the spirit of equality, rationality, and moving to meet each other halfway, the two countries have set up a number of communication and coordination mechanisms such as the Joint Commission on Commerce and Trade, the Strategic and Economic Dialogue, and the Comprehensive Economic Dialogue. Each has made tremendous efforts to overcome all kinds of obstacles and move economic and trade relations forward, which has served as the ballast and propeller of the overall bilateral relationship.
Economic globalization is the trend of the times, and peace and development represent the shared aspiration of all peoples. China-US economic and trade ties concern not only the well-being of the peoples of the two countries, but also world peace, prosperity and stability. Cooperation is the only correct option for China and the US. China’s position is clear, consistent and firm.
China is firmly committed to safeguarding its national dignity and core interests.
It is the hope of the government and people of China to promote business cooperation and develop stronger ties with the US. China maintains that problems and disputes arising from a fast growing China-US business relationship should be addressed with a positive and cooperative attitude, through bilateral consultation or the WTO dispute settlement mechanism, in a way acceptable to both sides. China has kept the door to negotiations open, but negotiations can only happen when there is mutual respect, equality, good faith and credibility. Negotiations cannot be conducted under the threat of tariffs, or at the cost of China’s right to development.
China is firmly committed to the sound development of China-US economic and trade relations.
Trade friction between the two countries should be properly resolved as it bears on global economic stability and prosperity as well as world peace and development. The sound and steady development of China-US economic and trade relations is in the fundamental interest of the two peoples and the common interests of people across the globe and is what the international community expects of us. China would like to work with the US in the same direction, focus on economic and trade cooperation, properly manage economic and trade differences, and make vigorous efforts to foster a new China-US economic and trade order that is balanced, inclusive and mutually beneficial, so as to contribute to the well-being of the two peoples. Under the condition of equality and mutual benefit, China is willing to resume negotiations with the US on a bilateral investment treaty, and launch bilateral FTA negotiations when appropriate.
China is firmly committed to the reform and improvement of the multilateral trading system.
The multilateral trading system centred on the WTO is the cornerstone of international trade, and a pillar for the sound and orderly development of global trade. China is firm in observing and upholding the WTO rules. China supports an open, transparent, inclusive and non-discriminatory multilateral trading system, and supports the reform of the global trade statistics system based on the global value chain and value-added in trade. China supports the necessary reform of the WTO and firmly opposes unilateralism and protectionism. Committed to pursuing open, integrated and win-win development, China is working to build an open world economy, promote trade and investment liberalization and facilitation, and make economic globalization more open, inclusive, balanced and beneficial to all.
China is firmly committed to protecting property rights and intellectual property rights (IPR).
China attaches great importance to IPR protection and views it as one of the most important parts of the efforts to improve the system for property rights protection. China will keep improving its laws and regulations on IPR protection and protect the lawful IPR of foreign businesses in strict accordance with the law. China will enhance its cooperation with all countries to protect IPR and hopes that governments of other countries will also step up their efforts to protect Chinese IPR.
China is firmly committed to protecting the lawful rights and interests of foreign businesses in China.
China is committed to building an open and transparent foreign-related legal system, improving the business environment, and providing better and higher-quality service to businesses from all countries operating and investing in China.
China respects international business practices, observes the WTO rules, and treats all businesses registered in China equally. China encourages market entities, including foreign businesses, to engage in various forms of cooperation, and stands committed to creating a level playing field in the market.
China is firmly committed to deepening reform and widening opening-up.
Reform and opening-up are China’s basic policies and provide the fundamental driving force for its development. China will not close its door to the world, but only open it wider. The market will play a decisive role in the allocation of resources and the government will play a better role to encourage competition and oppose monopoly. China is willing to draw on advanced experience and keep improving its systems, institutions and policies through reform and opening-up. China is also willing to share with other countries the new opportunities presented by its development.
China is firmly committed to mutually beneficial cooperation with other developed and developing countries.
China will work with the EU to expedite and strive for early consensus in the negotiations on the China-EU Investment Agreement, and, on this basis, take the China-EU FTA onto the agenda. China will accelerate negotiations on the China-Japan-ROK Free Trade Area and work for an early conclusion of the Regional Comprehensive Economic Partnership (RCEP). China will promote deeper cooperation under the framework of the Belt and Road Initiative based on the principles of consultation, cooperation and benefit for all, and make efforts to achieve policy, infrastructure, trade, financial, and people-to-people connectivity and create new drivers for common development.
China is firmly committed to building a community with a shared future for mankind.
Faced with a host of grave challenges to human progress, all countries, particularly major countries, need to shoulder the obligation and responsibility of guiding and promoting international cooperation. Countries should respect each other and engage in discussions as equals. Countries should manage differences and tensions properly, settle disputes and disagreements through dialogue and consultation, and replace estrangement with exchange, clashes with mutual learning, and superiority with coexistence among civilizations. China will continue to act as a responsible major country, and join every other country in building an open, inclusive, clean and beautiful world that enjoys lasting peace, universal security and common prosperity.
In a world of increasing uncertainty, instability and insecurity, China will remain true to its original aspiration, follow the trend of the times, shoulder its responsibility for justice, and pursue the greater good. China will unswervingly safeguard the multilateral trading system, press forward with the reform of global governance, promote world peace, contribute to global development, uphold international order, and build a community with a shared future for mankind.
H.E. Yan Xiusheng is the Ambassador of the People’s Republic of China to Barbados.