Coercion won’t help US balance trade

Source:Global Times Published: 2018/1/14 23:13:40

At the start of the new year, Chinese companies have been oppressed by the US on several occasions. Alibaba Group's Taobao, China's largest e-commerce platform, was blacklisted by the US Trade Representative on Friday for the second consecutive year over sales of suspected counterfeits. Earlier this month the US rejected a plan by Ant Financial, also under Alibaba, to acquire US money transfer company MoneyGram International. And Huawei's planned deal with US carrier AT&T to sell its smartphones in the country collapsed recently. Both plan failed due to US security concerns.

Washington has shown increasing, if not unbridled, political interference in China-US business cooperation. The ultimate goal of blacklisting Taobao and, similarly, citing national security concerns, is to protect US companies. The US has recklessly applied its hegemony in the economic and trade sector through outrageous use of non-market means.

But trading with coercion won't work. In 2017, Washington demonstrated a rarely seen strong emphasis on lessening trade deficits and heavily pressured its major trading partners. Yet its trade deficit still increased $50.5 billion in the first 11 months, with $25 billion growth in its trade deficit with China over the whole year. Apparently if the US doesn't put more efforts into domestic economic reform and making US products more competitive, punitive moves toward trading partners won't achieve much.

Alibaba and Taobao have passed through tests on the Chinese market and become a critical driving force for regional economic development. Huawei has built a reputation worldwide with cutting-edge technologies and play-by-the-rules business practices. It's unacceptable that the US deliberately makes business difficult for Huawei, and Washington will pay the price sooner or later.

These cases happened when plenty of analysis holds that the US will make a harsher trade policy toward China this year. This is alarming.

Will a trade war occur between China and the US? The answer may be "no," rationally speaking, as the two countries' trade volume approaches $600 billion, indicating high interdependence. As retail sales on the Chinese market are estimated to surpass those of the US, the two countries are close to being well-matched rivals in case of a trade war, leaving no reason for Washington to continue being pompous.

Politically, the administration of President Donald Trump can't afford to see China-US economic and trade ties become strained. China is more resilient to a trade war. If economic ties see tumult and tensions are triggered in bilateral political ties, the Trump administration, already under fire, will invite more attacks. China's low-profile approach to its trade disputes with the US doesn't mean it will tolerate unfair challenges. Beijing will firmly take countermeasures to safeguard basic rules and order in its economic cooperation with Washington.

China's trade surplus with the US is a natural outcome, not forced by the Chinese government. To reduce the trade deficit, US society needs to be more hard-working and efficient, and make reforms to keep abreast of the times, rather than mere changes to trade provisions by the administration.

Washington should forego its frustration at being taken advantage of by its major trading partner. It should invest more energy in making its products more popular in the world.



Posted in: EDITORIAL

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