China able to handle complex trade ties with US

Source:Global Times Published: 2019/4/11 21:58:40

The US Commerce Department announced Wednesday that 37 Chinese companies and schools are listed as "unverified" entities which US companies should treat with caution. 

Companies engaged in automotive technology, liquid crystal materials, precision optics, electronics, and machine tool production are involved. Schools on the list are the Guangdong University of Technology, Renmin University, Tongji University and two schools in Xi'an, the capital of Northwest China's Shaanxi Province.

The list also includes six organizations in Hong Kong as well as a few in the United Arab Emirates and Malaysia. The "unverified" list is often treated as an embargo by suppliers because of the hassle, even if it's not. Hence, its real effect is greater than its legal effect.

This is another new trick of the US to crack down on China's high-technology industry, a manifestation of the US' upgraded radical ideas of decoupling with China in this domain. Certain US elites hold that China has enhanced its modernization capabilities mainly by "stealing" technology from cooperation with the West, especially with the US. They believe decoupling can help contain China's further development.

US Treasury Secretary Steven Mnuchin said that same day that China and the US "pretty much agreed on an enforcement mechanism," and that the two sides are working on the establishment of an "enforcement office." His statement was immediately interpreted as a major breakthrough in bilateral trade talks.

Which news above represents the trend of China-US economic ties? Many may hesitate facing this question.

The US is determined to maintain its overwhelming superiority in the high-technology field, but companies in this industry can't survive without an enormous market. China is the US' largest overseas market in industries ranging from aviation to electronics. Once decoupled with China, many US technology-intensive enterprises will lose their driving force. This means the US must expand trade with China.

Meanwhile, the US wishes to cut off China's research ability and industrial chain required by technology development by restricting exports of key equipment and technology. In this way, the US can ensure its leadership and China's secondary status. The obvious wishful thinking of the US is somewhat understandable but also naive. It is using a much too simple mind to understand the complex China-US trade cooperation in the 21st century.

China and the US signing a trade agreement is the general trend, but it is unlikely to lead to peaceful and stable trade relations. 

It is hard to handle such a relationship, but China may lead it to reciprocity. First, China has a powerful industrial capacity and market. It has almost endless potential for exchanging interests with the US. The US can't restrict China's interests in all fields. 

Second, the US overestimates the effects of a technological embargo on China. China has a system of technological progress which will easily counteract the embargo through innovation and other ways.

Third, as a new system of production and consumption, globalization has become highly institutional. New motivation is much more powerful than few countries' selfish acts. This is independent from the US' will.

China has held its destiny in its own hands. The International Monetary Fund lowered its global growth forecast for 2019 but raised its forecast for China, which shows its optimism with China's ability to handle the trade war. China only needs to keep calm and do its best, and a promising future awaits the country.

Posted in: EDITORIAL

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