Sino-US relations still strong, despite trade friction

Source:Global Times Published: 2017/6/29 21:33:40

Philipp Rösler Photo: Li Qiaoyi/GT

Editor's Note:

In a multi-polar world, China and the US are decidedly two of the most powerful countries that underpin the global economy. But while China has continued broad-based efforts to rebalance its economy and integrate itself more into the world economy, the US has chosen to turn inward. This has inevitably resulted in tremors across the global economic and trade framework. Sharing his input on the complex yet significant bilateral relations between the two countries, Philipp Rösler (PR), head of Regional and Government Engagement and member of the Managing Board of the World Economic Forum (WEF) and former German vice chancellor, talked with Global Times reporter Li Qiaoyi (GT) in an exclusive interview on Wednesday at the "Summer Davos" forum in Dalian, Northeast China's Liaoning Province.

GT: What do you think are the main problems facing China and the US in opening their markets to each other?

PR: I think they should have deep discussions around different topics: foreign trade certainly, and customs, among others. There are always agriculture questions in the pursuit of free trade talks. The most challenging questions are those about food security, food safety and nutrition. But I guess it's first and foremost relevant to see that the two largest economies in the world are coming together.

And it's not only between China and the US. If you see the detailed discussions between the EU and the US, the Transatlantic Trade and Investment Partnership also had to work through agriculture questions.

GT: Would you describe the opening-up of bilateral markets as horse-trading?

PR: At the World Economic Forum in Davos in January, Chinese President Xi Jinping made an important speech, which is clearly a strong statement in favor of global trade. It was an excellent beginning and at the opening ceremony of the Summer Davos on Tuesday, Chinese Premier Li Keqiang also mentioned the country will open up even more. I think it's a clear statement and it's underscored by activities such as the vision of the Belt and Road (B&R) and even the sub agreements like the China-Pakistan Economic Corridor (CPEC). So there's a lot going on. Certainly China has taken over the leadership role in terms of global trade. At the same time, we see a strong domestic focus in the US. There's really a change and the change is being led by China.

GT: With the US already expressing an interest in participating in the B&R initiative, what areas and what kind of projects do you think will be of greatest interest to the US?

PR: It's not a secret that many other countries are attracted by the B&R initiative. And there's diverse interest, certainly in trade, in the US as well. And even more, it creates the right framework, for example, the right infrastructure that gets financial support from the likes of the Asian Infrastructure Investment Bank, which interests more countries.

In the case of the US, however, the initiative matters more in trade relations terms rather than in terms of infrastructure. So far, there's yet to be any indication that the US will participate in any concrete projects along the route such as the CPEC that involve building infrastructure.

GT: What do you think are the primary areas of competition between Chinese firms and their US counterparts?

PR: The main area of competition is a question of speed. As WEF founder Klaus Schwab mentioned in his opening remarks, it is not a case of the big fish eating the small one, but the faster one eating the slower one. That's exactly the area of competition in the era of the Fourth Industrial Revolution. So the fastest country will be the most successful country. New technologies such as blockchain, artificial intelligence and 3D printing already exist, but the question is how fast countries and economies can implement all the new technological developments. China has been adopting new technologies at a very fast pace. Also, the US is not sleeping, with innovation bustling in the country. At the same time, there are also discussions about the traditional industries. The merging of digital and traditional industries in order to improve production is also believed to be an area of competition.

The main message is that both have the same opportunity, which means it's really a level playing field for competition. And the good news is that it will not be a question of whether you have already had development before. So you don't have to run through the three previous versions of industrial revolution to catch up. You can leap forward. That's the message. It's more a question of the leadership internally, and if you have the power and willingness to implement and adopt new technologies.

GT: What do you think is standing in the way of forging closer China-US economic ties?

PR: Admittedly, there are discussions about frictions between the Chinese and US economies. But it shouldn't be overlooked that the same discussions also exist between the EU and the US, concerning subsidies, dumping and airlines. However they still have good relations, good trade relations in particular. What I would like to say is that negotiation is part of the normal relationship in business terms. Maybe sometimes there are tough discussions, but it's still part of normal negotiations. So I would not overstretch some debates. Instead, I would say the entire picture shows strong trade and business relationships and that's for the good.

GT: There are arguments that the US' withdrawal from the Paris climate deal offers a chance for China and India to take the lead in global energy transformation. Do you agree and what's your take on it?

PR: It's indeed very sad because everyone was in favor of the Paris agreement. Nevertheless the world's largest economy is leaving the agreement, which raises some questions.

The consequence, however, is not that others will say it's a defeat and will cancel the agreement. On the contrary, we should put some extra effort into making it a success anyway. China is taking a leadership role in fighting climate change. Certainly, it would be better if everyone could be integrated, but the reality is different as we all know.

GT: China has played a part in promoting inclusive growth, but with US President Donald Trump and his "America first" policy, which seems to be the other way round, is it the case that inclusive growth as a doctrine has yet to be received across the globe?

PR: There are two levels of inclusivity. The first is if countries and regions are included in trade systems and agreements, and the second is if inside the countries and regions everyone can benefit from the wealth created by the economy. The US has decided to focus more on the domestic market. Let's see how this works out. The others are not just waiting. Take the US' withdrawal from the Paris pact for example. The other countries would say if this does not come together, why don't we try something on our own? This motivates others to make extra efforts. Yes, some decided for themselves to go a different way, but the vast majority are going together.



Posted in: INSIDER'S EYE

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