Washington increased tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent on May 10, citing a China-US trade imbalance as a major reason for the tariff imposition. The claim of the imbalanced China-US trade is a “pseudo-proposition," said Gao Yan, chairwoman of China Council for the Promotion of International Trade (CCPIT).
(File Photo: VCG)
“The China-US trade relationship is based on the willingness of enterprises of the two countries and supported by consumers of the two countries,” said Gao, who is also a member of the National Committee of the Chinese People's Political Consultative Conference.
“The inflated US trade deficit with China is the result of a biased statistical method, which played down trade services and cross-border investments, and neglected the fact that the US had imposed strict restrictions on high-tech exports to China,” Gao said.
In order to clearly understand the full picture of China-US trade, Chinese and foreign experts comprehensively calculated the losses and gains in this relationship. They came to the conclusion that the role of cross-border investment in foreign trade should not be underestimated, and proposed the measurement be based on the ownership principle, which could better reflect China-US trade.
According to data provided by the US Bureau of Economic Analysis (BEA), the China-US trade surplus calculated by the ownership principle was narrowing between 2009 and 2017, Gao said. In 2017, China’s trade surplus with the US was only $45.3 billion according to the statistical method.
If the statistical scope is adjusted to include all American enterprises investing in China, in the 2009-2017 period, the US trade surplus with China widened from $14.5 billion to $160.4 billion based on the ownership principle.
The above statistics indicated that China-US trade is a win-win and mutually beneficial relationship, Gao pointed out.
China-US trade is related to the welfare of the peoples of the two countries. Gao expressed hope that the US could appropriately view China-US trade and refrain from distorting facts about China-US economic and trade relations.
The imposition of tariffs by the US will not only affect Chinese enterprises, but American enterprises as well. China is the largest developing country in the world, and the US the largest developed country. Cooperation leads to win-win results while confrontation leads to lose-lose situations, Gao said.
“Tariffs Hurt the Heartland,” a national campaign comprised of over 150 of America’s largest trade organizations, estimated that raising tariffs to 25 percent could cost nearly one million American jobs and increase the volatility of the financial market.
“It goes against the currents of the time to embrace the world with conservatism and narrow-mindedness. In doing so, the US will inevitably hurt itself,” said Gao.
“Cooperation is the best and the only option to resolve problems,” Gao noted. Only through strictly following the established principles and direction, strengthening communication, focusing on cooperation and controlling divergences can the China-US trade economic and trade cooperation and bilateral ties become healthy and steady. Bullying and extreme pressure go against the multilateral trading system, and levying tariffs will not help solve economic and trade issues.”
“The US side should not misread the situation and underestimate China’s resolution and willpower to protect its rights. China is not afraid of the pressure and has the confidence, resolve and capability to face up to challenges and difficulties,” said Gao.
“The country will steadfastly push forward reform and opening up, safeguard free trade and the multilateral trade system and achieve common development and prosperity with the world,” said Gao.