HEADLINE Protectionism will never win US competitiveness: experts


Protectionism will never win US competitiveness: experts

By By Zhang Niansheng, Wu Lejun, Hu Zexi and Zhang Mengxu | People's Daily app

13:51, April 07, 2018


Washington (People's Daily) - The short-sighted trade protectionism measures taken by the US is helpless to improve its competitiveness in global arena, experts pointed out, after the Office of US Trade Representative (USTR) on Tuesday published a proposed list of Chinese goods subject to additional 25 percent tariffs despite of strong opposition from China and US business groups.

The proposed list, which covered approximately 1,300 products imported from China, is based on a so-called Section 301 investigation into alleged Chinese intellectual property and technology transfer practices, launched by the Trump administration in August 2017.

The restricted measures launched by the US, mainly targeting at the technology industries such as aerospace, information and communication technology, robotics and machinery, cited the "Made in China 2025" strategy, a plan to upgrade the manufacturing sector, as an excuse. 

But experts found that the trade deficit of the US with China should be blamed to its long-term discriminatory export controls against China as well as strict control over high-tech exports to China.

The trade deficit with China of the US would drop 24 to 34 percent if Washington would liberalize its export barriers against China to the same level as those applicable to Brazil or France, said a report released by the US-headquartered think tank Carnegie Endowment for International Peace.

The deficit could be narrowed if the US eases its restrictions on high-tech exports to China based on consultation, said the report, adding that such move will at the same time satisfy China’s demands for technology upgrade. 

In the global supply chain that has taken shape, China occupies a seat in some advanced manufacturing sectors, and it is hard to find an alternative in a short run, said Yukon Huang, senior research fellow with the Carnegie Endowment for International Peace.

Against such background, the US companies have to pay extra costs for those China-made products and then transferred those expenses to consumers, explained Huang, also former Country Director for China of the World Bank, adding that the US public will be the final victim since their employment and daily life will be affected. 

A 25-percent tariff on imported Chinese information and communication tech parts and products could slow the growth of US output by $332 billion over the decade, the US-based think tank Information Technology and Innovation Foundation (ITIF) estimated in a recent report.

The US will suffer from less information and communication technology investment, lower creativity, declined productivity and weakened competitiveness as a result of the decision, since tech products constitute a key driver for productivity growth of commodities and service industries, the report concluded. 

There is no ground to blame technology transfer as along as such trade cooperation is consensual. 

“We are in a learning process with them together,” Jochem Heizmann, the chief executive of Volkswagen’s China operations told the New York Times when commenting on transferring technology with China’s electric car industry.

“That process is much faster than we are used to doing these things,” he added. 

The dilapidated China-US cooperation in aerospace sector can teach the US a lesson. The country’s government departments had been an objector of bilateral cooperation with a fear that such collaboration may lead to a technology leakage, and as a result put the country’s technology advantages, especially in military segment, in risks, Joan Johnson-Freese, a professor of National Security Affairs with the US-based Naval War College told People’s Daily.

But the business circle expected a closer cooperation with China, in a belief that in this way, they can learn more about China’s advanced technologies and contribute to the mankind’s exploration of outer space based on a sound model of international cooperation, the professor added.

The conservative decision makers ultimately gained an upper hand in the debate, leaving narrow room for bilateral cooperation in this field, according to Johnson-Freese. 

China’s aerospace technology finally advanced in a rapid pace that has gone beyond the expectation of the US, especially with its breakthrough in quantum communication technology.

“The US then hoped to beef up its cooperation with China, but has already missed the best time window,” said Johnson-Freese.

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