China ready for any outcomes in trade talks with US

By Hu Weijia Source:Global Times Published: 2019/5/8 20:38:40

US President Donald Trump's threat of increased tariffs on Chinese goods has added more uncertainty to trade talks with China. Some observers are worried that a tough stance may be taken by the US side during Chinese Vice Premier Liu He's visit later this week and thus drive the two nations away from a deal. 

No matter what the US side wants to do in the negotiations, China has the confidence to handle it. The worst-case scenario is that the negotiations break down and Washington comprehensively raises tariffs. Even if this happens, the Chinese economy will be able to withstand it. 

It's very unlikely for Beijing to make strategic compromises just because of the latest US threat of increased tariffs. The Chinese public does want an agreement, but not at any cost.

While many have been focusing on Trump's threat of increased tariffs, less attention has been paid to the economic logic behind China's calm toward the US' fickleness. 

Several Western media outlets in recent months have published articles suggesting the US trade row with China will boost Vietnam's economy as companies dodge tariffs by relocating production there. The first quarter of 2019 saw foreign investment in Vietnam rise, but the country cannot replicate the complete industrial chain built in China overnight. 

A similar scene has unfolded in some other Asian countries. They cannot replace China in the global manufacturing chain unless economic integration opens up their internal markets and creates a unified industrial chain among those nations.

Vietnam and India are trying to copy China as a new world factory, but until and unless they succeed, US consumers will hardly be able to find alternative products for many of those now made in China, so the tariffs threatened by the US side will ultimately be transferred to US consumers.

Made-in-China products aren't threatened by potential US tariffs. China's e-commerce giants have helped build an efficient logistics network at home and abroad, which has meant lower costs. 

Many manufacturers are making their production lines more flexible as they adapt to potential US tariffs. Such moves will help made-in-China products maintain a competitive edge even amid the trade row.

China has the confidence to face all possible scenarios in the trade talks, so there's no need for China to compromise.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn
Newspaper headline: China ready for any outcomes in trade talks


Posted in: EYE ON ECONOMY

blog comments powered by Disqus