Gold Carved Yu: What can China get from the US trade war

Gold Carved Yu

China and the United States, the largest economies in the world, are conducting a comprehensive trade war, and the lightning war that US President Trump's originally expected has now become more like a dying battle.Many people are worried that this is just the beginning of a long -term conflict. This conflict may include the use of weapons far beyond trade categories, which leads to casualties.

Since China joined the World Trade Organization in 2001, the United States has always expressed dissatisfaction with China's huge frequent account surplus and renminbi.But in the past ten years, this surplus has almost disappeared, and the yuan has basically appreciated.Now, the United States has shifted its attention to China's poor protection of intellectual property rights, and the use of market access in exchange for foreign technology.

However, in China, it is not only its specific trade policy that stimulates the United States, but also its overall development model and the desire to become a major country in the world, and this wish is not out of reach.In fact, the Chinese believe that the Trump's trade war effectively proves that China has pose a true and realistic threat to the United States hegemony.

It is so irrelevant to the facts; what is important is the view of the Chinese.In the past, only a few conservatives warned the United States to try to curb China, but now almost every Chinese believe in this statement, including more and more young people.

Growing up in prosperity and self -confidence, contacting the Western lifestyle and education, the Chinese millennials in the 1980s and the 1990s should usher in a more open and free era.But Trump's actions are shaken these young people's confidence in Western thought.According to previous reports, compared with their parents and grandparents, they have a better impression on Western countries and Japan.

The real danger lies in the continuous rise of nationalist emotions. It may grow a party forces called the new left in China. They condemn capitalism and their Western supporters, and called for the socialist order of Mao Zedong 40 years ago to return toEssence

From a positive perspective, this may bring the political cohesion required to implement structural reform, thereby achieving the transformation of economy from trade and manufacturing to domestic consumption.With the unity of different interest groups and factions to deal with common enemies, the leader of Chinese President will obtain more political capital to promote the transformation from export -oriented economic growth to trade neutral models.Tax reduction and family wealth re -distribution are also possible options.

This is not to say that China will not continue to implement further open plans.In order to fulfill its commitment to increase the total imports and stimulate domestic consumption, even when China imposed tariffs on imported goods in the United States, it is also reducing tariffs on other countries.China is about to implement the liberalization policy of the financial service industry, which will be the biggest step towards opening up since it joined the WTO.

The areas of open foreign participation include banks, securities, insurance, payment and rating services.Restrictions on foreign investors holding or investment services are gradually canceling.In order to better reflect the spirit of good and slower than the late and slower than the slower than that, at least seven of the 11 measures announced by the People's Bank of China in April have been implemented.

However, while China continues its economy, it is increasingly increasingly setting its sights to the country, turning citizens into consumers and promoting enterprises to adopt and invent new technologies.Many companies have doubled their efforts to improve their value -added and innovative capabilities.

Whether Trump's trade war wants to curb China or punish China alone because of trade behavior, the unexpected result is that China is now self -armed for a new era full of political and economic challenges.Yes, for example, China will find more difficult to implement the Belt and Road Initiative, or export excess capacity.But in the long run, reducing dependence on foreign trade and import technology will make China stronger, more tough, and may be more unwilling to accept the rules formulated by the United States.

Sometimes, the losers of the trade war will eventually get a better result than the winner.In the 1980s, when President Reagan implemented the number of cars exported to the United States, Japan suffered heavy losses.But over time, the Japanese automotive industry has developed, and it can export more expensive cars.

Trump believes that using trade attacks China will help the United States greatly, but this is more likely to make China stronger.

Author Keyu Jin is a professor of economics at the London School of Economics and a member of the World Economic Forum Global Young Leaders and a Consultant Committee of Liceng Group.

English Title: What China Can Gain from Trumps Trade War

Copyright: Project Syndicate, 2018.