China clarifies facts on trade relations with US in newly-released white paper

According to the United States International Trade Commission, by July 17, 2018 there were 44 anti-dumping and countervailing policies in effect in the US, among which 58% were adopted after the 2008 financial crisis, with China, the EU and Japan as the main targets.

176

By People’s Daily Overseas Edition

On Monday China published a white paper to clarify the facts about China-US economic and trade relations, demonstrating China’s stance on the trade friction with the US and pursuing a reasonable solution.

The document, titled “The Facts and China’s Position on China-US Trade Friction”, is China’s official response to the excuses the US cited to initiate the trade war, the largest tariffs ever in history imposed by the US.

The US claimed that it was a “loser” in its trade with China and China forced the US into technology transfer, but the facts illustrated in the paper issued by the Information Office of China’s State Council prove to be otherwise.

US exports to China are growing much faster than its global average. UN statistics indicate that in 2017 US exports of goods to China amounted to $129.89 billion, a 577% increase from $19.18 billion in 2001 when China joined the World Trade Organization (WTO), and far higher than the 112% average growth rate of overall US exports.

China did not steal US jobs, the white paper revealed. According to a US-China Business Council estimate, in 2015, 2.6 million jobs in America were supported by US exports to China and US-China two-way investment. Specifically, Chinese investment covered 46 states of the US, generating more than 140,000 jobs for the US, most of which were in manufacturing.

In addition, products from China drove down commodity prices in the US and saved American households more money. According to the US-China Business Council, in 2015, trade with China saved every American family $850 of expenditure each year, equivalent to 1.5% of the average household income in the US.

Besides, the US accusation of the so-called forced technology transfer by China cannot hold water either. Since 2000, the total R&D spend in China has registered an average annual growth rate of close to 20%. In 2017, China spent 1.76 trillion yuan in R&D, the second in the world, according to the white paper.

Even US companies repeated that they had never been forced into technology transfer in China during the previous hearing sessions held to review the plans of imposing additional tariffs on Chinese goods.

In other words, the “forced technology transfer” accusation was adopted to cover the fact that the US was the largest beneficiary of technological cooperation.

According to the Peterson Institute, China’s payment of licensing fees and royalties for the use of foreign technology has recorded a four-fold increase over the last decade, reaching $28.6 billion in 2017.

Chinese statistics indicate that the US is the largest source of intellectual property imports to China. China’s payments for US intellectual property doubled in six years from $3.46 billion in 2011 to $7.2 billion in 2017.

In breakdown, China’s intellectual property payments to the US accounted for a quarter of its total payments to foreign countries.

The white paper also unveiled Uncle Sam’s discrimination against foreign products, abuse of “National Security Review” as a way to obstruct the normal investment activities of Chinese companies in the US, large subsidies that distort market competition, the use of large-scale non-tariff barriers and the abuse of trade remedy measures.

Many of these measures targeted China, said the paper, elaborating that from 2013 to 2015, the Committee on Foreign Investment in the United States (CFIUS) reviewed in total 387 transactions concerning 39 economies, among which 74 were transactions involving investment from Chinese companies, accounting for 19% of the total, the largest share among all countries for three years in a row.

According to the United States International Trade Commission, by July 17, 2018 there were 44 anti-dumping and countervailing policies in effect in the US, among which 58% were adopted after the 2008 financial crisis, with China, the EU and Japan as the main targets.

The current US administration was always internationalizing domestic issues and politicizing economic and trade issues, the white paper pointed out.

It erroneously attributed unemployment caused by domestic policy and institutional flaws to international trade, and blamed other countries for its own problems, the document added.

China, as the biggest source of the US trade deficit, was a convenient primary target, stressed the paper.

But the truth betrays what US has claimed. Statistics from the UN show that between 2001 and 2017, China-US trade has expanded by a factor of 4.41, and yet unemployment in the US dropped from 5.7% to 4.1%.

Former US Secretary of Treasury Henry Paulson said in his book published in 2015 that the US adopted protectionist trade policies because its companies were worried about the “unfair competition” in the Chinese market, against the backdrop of US economic stagnancy and the widening gap between the rich and poor.

Many Americans started to accept the wrong and dangerous opinion that the US didn’t benefit from international trade, including its bilateral trade with China, he noted.

The situation was worrisome in many aspects, especially in trade and investment. The two areas saw the closest economic ties between each other, but they were now being doubted and attacked, the book said.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.