(Yicai Global) April 16 -- Starting a trade war is the wrong thing to do, and no one will benefit from it, said Cui Tiankai, China’s ambassador to the US, as China Central Television reported.
China oppois reluctant to be provoked into a trade war, but the country is not afraid of it, he added. If someone insists on starting one, China will fight it to the end, Cui told the Penn Wharton China Summit held on the campus of the University of Pennsylvania in Philadelphia, the US yesterday.
The argument that the US has been ripped off in bilateral trade with China simply does not hold water, he noted. China-US trade has skyrocketed since the establishment of diplomatic ties, growing from virtually zero at the time of President Richard Nixon’s 1972 visit to China to over USD580 billion last year. Investment between the countries has also consistently ncreased, benefiting both economies.
American companies have contributed positively to economic development in China, and the Chinese government always recognizes that. They have also reaped considerable commercial gains as their market share continues to expand. For example, as of February, Chinese buyers had ordered a total of 1,690 aircraft made by the Chicago, Illinois-based Boeing Co. and 1,389 of them had been delivered. Some 26 percent of the total number of airplanes delivered by the US giant in 2017 went to China. Of all the soybeans exported by the US last year, more than 60 percent sold on the Chinese market. China sales account for more than half or even two-thirds of the exports of many other products made in the US.
The current trade imbalance does indeed give grounds for concern, but China wants to redress it rather than seek a trade surplus with any nation. The huge trade deficit with the US is attributable to numerous reasons including issues relating to the global industry chain and economic structure, a low savings rate among American consumers, and domestic policies. The US government has erected barriers to exports of high-tech products to China. In many cases, the latter wants to buy more, but the US will not sell, and this has also exacerbated the trade gap. This issue must be addressed, but the real cause must first be identified. Starting a trade war is entirely the wrong thing to do, and it will benefit no one.
Commenting on the view that ‘Chinese workers have stolen jobs from Americans,’ Cui said both Chinese and American workers have the right to work and seek a better life, and their desires should be fulfilled. Chinese workers did not go to the US to look for jobs there, and it was American companies who started globalized resource allocation and production to maximize profits.
The US economy benefited greatly from this, as manifested by an almost twofold increase in its gross domestic product between 2001 and 2017, as well as the strong growth of wealth in American society. However, the living standards of many US citizens also declined under these circumstances. This is clearly a domestic issue, but those unwilling or unable to solve this problem wish to seek a scapegoat overseas. Such a pretext does not protect the interests of US workers, but only serves certain interest groups, Cui argued.