CHINA The 13 key points from the white paper on Sino-US trade friction


The 13 key points from the white paper on Sino-US trade friction

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00:04, September 25, 2018

China published a white paper on Monday to clarify the facts about China-US economic and trade relations, demonstrate its stance on trade friction with the United States, and pursue reasonable solutions.

The 13 key points extracted from the white paper are the highlights.

1.Some Americans claim that the United States is “losing” in this relationship, a claim which does not stand up to scrutiny

Economic and trade relations have developed steadily since the establishment of diplomatic ties between China and the US, with fruitful results achieved in trade and investment. China benefits remarkably from the strong synergy, while the US also reaps extensive economic benefits from the opportunities and results generated by China’s growth. 

In general, China-US trade and economic cooperation is a win-win relationship and by no means a zero-sum game, bringing concrete benefits to US companies and people. Some Americans claim that the United States is “losing” in this relationship, a claim which does not stand up to scrutiny. 

2.The US blames China for the imbalance, which is unfair and unreasonable

The imbalance of trade in goods between China and the US is more of a natural outcome of voluntary choices the US has made in economic structure and market in the light of its comparative strengths. To resolve this issue, both sides need to make concerted efforts in restructuring. The United States turns a blind eye to various factors in its trade and economic cooperation with China, singles out the imbalance of trade in goods, and blames China for the imbalance, which is unfair and unreasonable.

3.The idea of “fair trade” advocated by the US will result in broader inequality

Unlike previous administrations, the incumbent administration emphasizes a “fair trade” that is not based on international rules but “America first”, or the protection of America’s own interests.

The idea of “fair trade” and “reciprocal opening up” advocated by the US ignores the existence of objective differences among countries in terms of stage of development, resources, and competitive industries, and ignores developing countries’ right to develop. It will create an impact on the economy and industries of the developing countries, result in broader inequality, and eventually prevent American businesses from expanding their international market share and sharing development opportunities in the developing countries.

4.It is a complete distortion of China’s so-called “forced technology transfer”

Since the adoption of reform and opening up, foreign enterprises have established partnerships with Chinese companies by voluntarily entering into contracts. They transferred production capacity and orders to China of their own volition so as to tap into the emerging market, save production costs, achieve economy of scale, and extend the term of profiting from technologies. These are voluntary behaviors based on business interests. However, it accords with neither historical facts nor the spirit of contract to unjustly label bilateral transactions on a voluntary basis as forced technology transfer simply on the grounds of Chinese firms’ technological advances.

It is a complete distortion of the facts that the US administration labels as forced technology transfer the voluntary behaviors of FIEs to partner with Chinese companies, transfer or license technologies, and reap profits together in Chinese market by entering into business contracts.

5.China’s huge efforts and achievements with regard to IPR protection should not be dismissed

China’s attitude towards IPR protection is clear and firm. It has continued to reinforce protection through legislation, law enforcement and the judiciary, and achieved some notable successes. Official reports by the US administration before 2016 also acknowledged China’s achievements in IPR protection. The China Business Climate Survey Reports by the American Chamber of Commerce in China indicate that, among the main challenges facing its member enterprises in China, IPR infringement has dropped from the 7th biggest concern in 2011 to 12th in 2018. The recent accusations by the US administration about China’s IPR protection are unrealistic and completely dismissive of China’s tremendous efforts and achievements in this regard.

6.The Chinese government’s encouragement to Chinese business to go global should not be distorted as a government attempt to acquire advanced technologies through commercial M&A

It is consistent with the WTO for the Chinese government to encourage businesses to go global and engage in international economic exchanges and cooperation. As Chinese companies get stronger and the need for resource allocation and market expansion increases, a growing number of firms have started to expand overseas at their own initiative, a trend in line with economic globalization. Like other countries and regions in the world, the Chinese government supports able and competent companies in outbound investment and tapping into international markets, while obeying the laws and regulations of the host countries as well as international rules. The government only provides services that facilitate this outbound investment and cooperation. The arbitrary conclusion of the US that such support is a government act to acquire advanced technologies through commercial M&A is groundless.

7.The trade protectionist practices of the US administration

The numerous investment and trade restriction policies and actions adopted by the US that distort market competition, hamper fair trade, and lead to breakdowns in global industrial chains are detrimental to the rules-based multilateral trading system and severely affect the normal development of China-US economic and trade relations.

8.The trade bullyism practices of the US administration

As the key builder of the international economic order and a major participant in the multilateral trading regime after the Second World War, the US should have taken the lead in observing multilateral trade rules and properly handling trade frictions with other WTO members through the dispute settlement system within the WTO framework. This is what the US government explicitly pledged to the international community. However, since taking office, with a narrow focus on “America First”, the new US administration has practiced unilateralism and economic hegemony, abandoned its international commitments, and provoked international trade friction around the world. This has not only undermined the interests of China and other countries, but also jeopardized the international reputation of the US itself. And above all, it has shaken the foundations of the global multilateral trading regime, which will ultimately hurt the long-term interests of the US.

9.The extreme trade protectionist measures the US government adopted have undermined the global trade relations

The US government has taken extreme trade protectionist measures, which have undermined the international economic order, caused damage to China-US trade and trade relations around the world, disrupted the global value chain and the international division of labor, upset market expectations, and led to violent swings in the international financial and commodity markets.

10.China has the confidence, resolve and capability to meet all risks and challenges

China does not want a trade war, but it is not afraid of one and will fight one if necessary. We have a highly resilient economy, an enormous market, and the hard-working, talented and united Chinese people. We also have the support of all countries in the world that reject protectionism, unilateralism and hegemony. We have the confidence, resolve and capability to meet all risks and challenges. No external factor will hold back China’s development.

11.The sound and steady development of China-US economic and trade relations is what the international community expects

Trade friction between the two countries should be properly resolved as it bears on global economic stability and prosperity as well as world peace and development. For China and the US, cooperation can lead to mutual benefits while confrontation will do no good to anyone. The sound and steady development of China-US economic and trade relations is in the fundamental interests of the two peoples and the common interests of people across the globe, and is what the international community expects of us.

12.China will not close its door to the world, but only open wider

Reform and opening-up are China’s basic policies, and provide fundamental driving force for its development. China will not reverse course, but only deepen its reform. China will not close its door to the world, but only open wider. Following the plans made and pace set, China will stay firmly committed to deepening reform and widening opening-up, advance the rule of law across the board, and build a socialist country under the rule of law.

13.China will follow the trend of the times, shoulder its responsibility for justice, and unswervingly safeguard the multilateral trading system

“A just cause enjoys abundant support while an unjust one finds little support.” In a world of increasing uncertainty, instability and insecurity, China will remain true to its original aspiration, follow the trend of the times, shoulder its responsibility for justice, and pursue the greater good. It will unswervingly safeguard the multilateral trading system, press forward with the reform of global governance, promote world peace, contribute to global development, uphold international order, and build a community with a shared future for mankind.

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