OPINIONS US economic hegemony bodes ill for the world: China Daily editorial

OPINIONS

US economic hegemony bodes ill for the world: China Daily editorial

chinadaily.com.cn

23:22, July 03, 2018

A US flag flies outside the New York Stock Exchange. Stocks are off to a mostly lower start on Wall Street on May 31, 2018. (Photo: IC)

The Trump administration, in its latest attempt to block Chinese entry into the US market amid its ongoing trade dispute with China, is recommending that the application by China Mobile to provide telecom services in the United States be denied.

Unsurprisingly, the administration has cited national security concerns to back its decision — the same concerns the administration cites when denying the acquisition of US technology-related companies by Chinese enterprises.

As the world’s most powerful economy, the US plays a vital role in global economic and trade rule-setting and it is always able to find seemingly plausible reasons for its initiative targeting China. When it comes to trade, for instance, it claims that China adopts “unfair” trade practices that have caused the huge bilateral trade gap, ignoring the fact that the US’ trade deficit is a result of the changing global division of labor over the past decades and the low savings rate in the US.

Transit trade, which refers to goods shipped from other countries to the US via China, which is calculated by the US as imports from China, also accounts for the trade deficit figures the Trump administration cites, something it refuses to acknowledge.

Another example of unfounded finger-pointing by the US is the Made-in-China 2025 initiative. The US has claimed that China uses public funds to support its industrial development, which puts US companies at a disadvantage, paying no heed to the fact that China’s use of policy and industrial funds to accelerate industrial expansion is a common practice across the world.

Therefore, to many, the trade war the US sees intent on initiating is the country’s strategy to keep China on the back foot so that it will not develop as fast as it otherwise would, and thus unable to challenge the dominant role of the US in the global economic order.

The US has maintained hegemony in the military and financial fields for many decades. Now it is pursuing economic hegemony.

It has frequently waged wars against other sovereign countries and made use of the dominant influence of the US dollar in the international markets to fleece other countries. Now it is attempting to resort to an all-out trade and economic war to hold back China’s normal development.

This hegemonic mentality is dangerous for the world economy, which requires close cooperation and normal competition, not a damaging trade war, to achieve sustainable growth. Although it may temporarily bring some benefits to selected US industries and workers, it will ultimately make the US lose creditability in the international community and bring destructive uncertainties to international investors that eye the US market.

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