Criticism of China exposes US’ protectionist instincts

By Chen Feixiang Source:Global Times Published: 2018/2/5 0:03:39

Illustration: Luo Xuan/GT

The US has recently enacted a number of trade remedy measures that have not only aggravated uncertainty about the global economic outlook, but also greatly damaged the reputation of the US in an era of globalization. However, when US Commerce Secretary Wilbur Ross made a speech at the World Economic Forum in Davos, he failed to reflect on these US mistakes and blamed the climate of trade protectionism on China. It is worth pondering who is genuinely undertaking trade protectionism.

It's clear that the logic here is that the US is inclined to protect those fields in which it has no comparative advantages, while for those in which it does have advantages, it does not want other countries to compete in them. Moreover, the implication is that the security of the US is more important than that of other countries.

Is the "Made in China 2025" program, which focuses on emerging strategic industries, really a protectionist policy? Ross is not the only or the first person to suggest this. But we have to point out that this is an irrational argument.

It is well known that the purpose of the WTO is to promote the economic development of all countries through international trade rather than to deprive some countries of the right of economic development. Does all the competition that arises in other countries represent trade protection and threats? And does the West not interfere in the internal affairs of other countries by virtue of its economic and technological advantages?

The essence of a market economy is to encourage competition, which of course includes competition between countries. Some countries took the lead in developing certain high-tech industries, obtaining strong economic benefits and promoting the progress of human society at the same time. All these are certainly good things. However, other countries, especially the latecomers, have the right to develop their own advanced high-tech industries so as to promote continuous economic and technological progress.

Any attempt to oppose the high-tech development of other countries by any pretext is nothing but a monopolistic position, which runs counter to free trade. The active development of electronic chips and other products in China, providing a certain level of market share in the domestic market, is not aimed at dominating the market. If some people want to dominate the Chinese market in the name of free trade in the long run, they will definitely be disappointed.

On the issue of free trade, Western countries seem a little bit hypocritical. There are always people promoting their own interests under the banner of free trade, while accusing others of protectionism.

At present, China is the largest importer of electronic chips and has made tremendous contributions to global scientific and technological progress. China has made efforts to develop its own chip industry and join the global market with the identity of a provider as a well as a buyer. In recent years, a large number of expensive Western products have become cheaper as a result of competition from Chinese firms, which has played an important and positive role in accelerating the economic development of some less developed countries.

When criticizing competition from China, the US always questions the role of China's government. This is just a way to label China a non-market economy. From the time of Adam Smith, Western economic theory has recognized the connection between the market and the government. Without a government to maintain law and order and provide public goods, a market economy cannot operate normally.

China has established its own unique market economy system. The development of high-tech industries is not only open to domestic enterprises with different ownership structures, but also to foreign-funded enterprises. Here, the market plays a decisive role.

Is the operation of the US market affected by the US government? It is well-known that the vast government agencies in the US are constantly intervening in the market. If the government is not needed, why did the Trump administration push for tax relief?

Through faster and greater opening-up, China has in recent years made profound efforts to promote free trade, and its efforts to strengthen international economic cooperation have received wider and wider recognition.

So far, the countries in the West have been the biggest beneficiaries of economic globalization. It is high time they accepted competition from emerging economies. Accommodating changes with an open mind would be a wiser choice than trying to protect traditional advantages. A beautiful future for humankind should be created hand in hand by all countries.

The author is a professor with Shanghai Jiao Tong University.

Posted in: INSIDER'S EYE

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