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White paper lays out facts about China-US trade frictions

Editor: Zhang Jianfeng 丨China Plus

09-25-2018 09:27 BJT

Note: The following is an edited translation of a commentary from the Chinese-language "Commentaries on International Affairs."

On September 24, as Chinese people celebrated the traditional Mid-autumn Festival, the Chinese government issued a White Paper stating the facts and its position on the trade frictions with the United States. The analysis highlights the mutually-beneficial nature of China-US economic and trade cooperation, refutes the false accusations in the Section 301 report and demonstrates China's policy stance on the trade frictions.

The US government's unilateral decision to escalate trade frictions runs against the majority opinion of the international community and will lead to an even graver impact on the recovery of the world economy. As such it is necessary and timely that the Chinese government released this White Paper to clarify China's perspectives and proposals on building trust, promoting cooperation and managing differences between China and the United States. Hopefully this will foster an objective and rational understanding about the trade frictions in the international community.

The White Paper is 36,000 Chinese characters. It is rich in statistics, diagrams and case studies, most of which are pulled from the works of US government institutions, multi-national corporations and world-renowned think tanks and scholars. Based on the facts and analyses in the book, readers can recognize the concern and truthfulness that the Chinese side has demonstrated in the trade dispute, and the effort it has made to safeguard China-US common interests and the international order of trade.

Excluding the foreword, the six-chapter White Paper delivers messages in three parts:

The first part clarifies the facts about China-US trade and economic relations and analyzes the consequences of the United States' trade protectionist practices and trade bullying.

The United States started the trade war with the pretext that China has been getting the better end of the trade arrangement, and that as a result, the United States is on the losing end. Thus, the US is demanding so-called "fair trade" and "reciprocal openness." This claim may misguide people who are not sufficiently informed. But using statistics on China-US commodity and service trade, as well as investment, the White Paper is able to show that China-US economic and trade cooperation has been win-win, not a zero-sum game. The US-on-the-losing-end theory does not hold water.

The White Paper also provides evidence to refute false accusations against China in the Section 301 report, such as causing a trade imbalance, promoting unfair trade, demanding forced technology transfers, encouraging IPR theft and offering industry subsidy policies, etc.

The White Paper states that the WTO guideline for mutual benefit is promoting real fairness in the international community because it allows for the different stages of development for different countries.  In comparison, the demand for so-called "fair trade" and "reciprocal openness" disregards the differences among different countries in various stages of development, endowment and comparative advantage. It also ignores developing countries' right to develop, brings harm to their economy and industries and, as such, will lead to unfairness on a wider scale.

The White Paper lays out China's stance on trade issues with the United States as well as on international relations.

China's position has been clear, consistent and firm regarding the trade disputes initiated by the United States. The White Paper says this has been manifested in eight aspects: 

First, China is firmly committed to safeguarding its national dignity and core interests. 

Second, China is firmly committed to the sound development of China-U.S. economic and trade relations.

Third, China is firmly committed to the reform and improvement of the multilateral trading system.

Fourth, China is firmly committed to protecting property rights and intellectual property rights (IPRs).

Fifth, China is firmly committed to protecting the lawful rights and interests of foreign businesses in China.

Sixth, China is firmly committed to deepening reform and widening opening-up.

Seventh, China is firmly committed to mutually beneficial cooperation with other developed and developing countries.

Eighth, China is firmly committed to building a community with a shared future for humanity.

These eight aspects not only concern China-US trade issues, but also address international relations, which demonstrate China's responsibility as a major country.

The White Paper also provides a way forward for the two sides to seek reasonable solutions to China-US trade issues.

The analysis notes the two countries are at different stages of development and have different economic systems, and therefore some level of trade friction is only natural. It says the key lies in how to enhance mutual trust, promote cooperation and manage differences. 

The White Paper says that with the US insisting on escalating the trade tensions, the two sides will both suffer from the additional tariffs, which will also be detrimental to the global supply chain and economic recovery. It notes that there needs to be a proper solution to China-US trade issues which concern not only global economic stability and prosperity, but also world peace and development. It says China is willing to meet the US half way to build a new order in economic and trade relations that is balanced, inclusive and mutually beneficial. It also stresses that the door for negotiations with the US is always open, but that negotiations must be based on mutual respect, equality, trust and consistency in both words and actions. The negotiations cannot be conducted under the threat of tariffs, or at the cost of China's development rights. These principles have charted a correct path for resolving the trade disputes between the two countries.

In order to find lasting solutions to problems, an objective, comprehensive, and rational understanding of the situation is needed. This is what the White Paper provides. It makes it clear that the United States and China have a highly complementary and interdependent economic and trade relationship. This is why, for the benefit of the people on both sides, a way forward must be found to resolve this dispute. Because there are no winners in a trade war. 

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