G20 helping the world escape protectionism

By Zhu Feng Source:Global Times Published: 2018/11/29 21:53:40

Illustration: Luo Xuan/GT



 

The upcoming meeting between the two leaders of China and the US during the G20 summit in Argentina will be watched closely by the world in the coming days. During the past six months, the US government has launched protectionist trade measures against many countries and economies, including China, putting the global economy under growing pressure. It remains to be seen whether the G20 summit will ease this situation.

The global stock markets have been sluggish recently, and major economies like Japan and Germany recorded slowing economic growth in the third quarter. Under the impact of trade protectionism, the global economy has started to show signs of slowing and there may be worse to come.

The most important factor comes from the impact of the trade war and protectionism. The world's industrial chain and supply chain have become a huge network connecting major economies, so even though the US has mainly been targeting China, it has still aroused concerns among global investors and led to disruptions in the supply chain.

In the third quarter of this year, the Japanese economy contracted at an annualized rate of 1.2 percent, with its exports of machine tools to China down 15.7 percent year-on-year. While natural disasters such as typhoons have had a certain impact, weaker consumption and shrinking exports are still the main problems.

Meanwhile, German exports of manufactured products to Asian countries including China fell by 11 percent year-on-year in the third quarter, and the country's economy contracted by 0.2 percent, the worst economic performance since 2013.

Although China's exports still grew in the third quarter, it is generally expected that the country's export orders will drop significantly next year. Moreover, currencies of other emerging economies have depreciated by more than 20 percent amid slack economic growth during 2018. In this context, if the US government doesn't end its trade protectionism, the global economy will be under more pressure in 2019.

According to White House economic adviser Larry Kudlow, US President Donald Trump sees a "good possibility" that the US and China can reach a deal during the meeting with Chinese President Xi Jinping. But he also said that "certain conditions have to be met," and that if that doesn't happen the US is ready to hike tariffs further. Such an attitude is not conducive to finding a pragmatic way for China and the US to resolve their trade issues.

In essence, the US government is trying to use the trade friction to restore the gap between China and the US in terms of core manufacturing, emerging sectors and technological innovation. In fact, China's development is not meant to challenge the status of the US, but to meet people's demand for a life of prosperity, freedom and dignity. Even if the US is dissatisfied with China's industrial policy and market opening, it can still resolve disputes through a "problem-oriented" bilateral dialogue mechanism or through the WTO arbitration and mediation mechanism.

The US is asking for too much by requiring China to be in full accordance with the US' standards. The pressure of trade friction should be transformed into a driving force to facilitate China-US cooperation and to guide China's reform progress, so that the two countries can achieve their respective goals and their people can benefit from the bilateral economic ties. The US has introduced various restrictive policies aimed at curbing China's trade, investment, technology, industrial cooperation and business competitiveness. The relationship between the two countries is now full of tension, which is mainly reflected in four key aspects.

First, the "China threat" theory has evolved from ideological and military levels to "a threat to overall society." For some in the US, even the hard work and patriotism of Chinese people is seen as a source of the "China threat." Second, China's choice of a development path with Chinese characteristics has become an important source of concern and dissatisfaction for some Americans. Third, their concern about China's economic power has far outweighed worries over China's military power. Fourth, some people in the US have threatened to "close the door" to China in the fields of technology and innovation. These four major issues are unreasonable, as they represent nothing but the US' ambition to maintain and consolidate its global hegemony.

The improvement of China-US relations was one of the contributing factors in China's reform and opening-up 40 years ago. Today, the changes in China-US relations cannot impede the progress of China's continued integration into the world. China will change as the external environment has changed, and its development will prove inexorable in the new era.

The author is director of the Institute of International Relations at Nanjing University. bizopinion@globaltimes.com.cn



Posted in: EXPERT ASSESSMENT

blog comments powered by Disqus