Two prominent former Chinese trade officials have hit out at unfeasible US threats of decoupling, while vowing the world’s second biggest economy will do whatever it takes to stay connected to the global trade system.
Long Yongtu, China’s former vice-minister for trade, told a forum in Beijing on Tuesday that China will use “every means and every platform” possible – including the World Trade Organisation (WTO) – to keep itself deeply embedded in the global economy and maintain investment flows.
At the same time, it will also “repair and strengthen” its domestic industries to ensure its central role in global supply chains, said Long, who was China’s chief negotiator for entry into the WTO in 2001.
China’s exports have proven resilient this year, with trade data from August underlining the world’s reliance on it for medical goods and electronics. The same data showed that Beijing’s trade surplus with Washington grew 27 per cent in August from a year earlier, despite talks of decoupling between the world’s two largest economies.
China remains the largest source of imports for the US and the US trade deficit with China hasn’t changed much
Former commerce minister Chen Deming said US efforts to curb Chinese exports and narrow the trade deficit have not had much impact since the start of the trade war more than two years ago.
“Although the average US tariff on Chinese imports has increased to about 20 per cent … China remains the largest source of imports for the US and the US trade deficit with China hasn’t changed much,” Chen said at the same event, the China International Fair for Trade in Services.
Chen, now president of the China Association of Enterprises with Foreign Investment, a government-led body composed of multinational firms, said it was time for the White House to “stop burying its head in the sand like an ostrich” and negotiate with China.
Decoupling was not feasible because the two nations “are complementary and one can’t leave the other”, he added.
The comments came just hours after US President Donald Trump pledged to reward American companies that moved operations out of China and raised the possibility of halting business with the country altogether.
“We will make America into the manufacturing superpower of the world and will end our reliance on China once and for all,” Trump told reporters on Monday. “Whether it’s decoupling, or putting in massive tariffs like I’ve been doing already, we will end our reliance in China, because we can’t rely on China.”
The Chinese government has repeatedly said it wants to resuscitate its economic relationship with the US.
Amid increased US hostilities towards Chinese businesses, Beijing is rolling out the red carpet for American companies, including financial institutions.
There will be no hope for globalisation without China-US cooperation
President Xi Jinping is using events such as the current week-long China International Fair for Trade in Services in Beijing to push a message that China is opening its domestic market to the world.
Liu Shijin, deputy director of the Economic Committee of the National Committee of the Chinese People’s Political Consultative Conference, said it was impossible for China and the US to decouple.
“China-US economic, trade and political ties have plunged to their worst level in four decades … but cooperation should remain the main theme,” Liu said. “There will be no hope for globalisation without China-US cooperation.”
August trade data showed China’s exports grew 9.5 per cent from a year earlier and the US was the biggest buyer of Chinese shipments for the fifth consecutive month.
Exports to the US jumped 20 per cent from a year earlier to US$44.8 billion, according to South China Morning Post calculations.
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