Yu Zhi: The two sides did not stop the fire. They just agreed that they did not exacerbate the trade war and did not reach an important consensus. Structural contradictions still need to be resolved further.

On December 1, the bilateral talks between the leaders of China and the United States at the G20 summit in Argentina achieved positive results, and the United States agreed not to impose new tariffs on China for the time being.Chinese media (including formal media and self -media) cheering for this, regarding it as major progress and good news, believes that China and the United States have reached an important consensus, and even described the words of the Sino -U.S.

The author believes that the results of the Sino -US summit talks are indeed positive, but it is not advisable to interpret excessive optimism: the two sides have not stopped the war, they just agree that they do not exacerbate the trade war, and they are temporary.Contradictions (including state -owned enterprises and industrial subsidies that have not been mentioned in the US statement) still need to be further negotiated and resolved, otherwise the trade war will continue and even expand.

First, the two parties are just temporary without exacerbating the trade war, not the suspension of the suspension

Judging from the press release issued by the White House, China and the United States only reached two aspects of limited consistency:

(1) The two sides just do not exacerbate the trade war rather than the suspension of the war.

The United States agreed that after January 1, 2019, the tariff rate of US $ 200 billion in export products on China remained at a level of 10%, and it was temporarily not adjusted to 25%of the previously announced (but the United States did not promise whether to pay for the remaining.China's US $ 267 billion in products imposed tariffs).The Chinese compromise that is obtained is a large number of Chinese products (agriculture, energy, industry and other products) in China.

This shows that the two sides only agree to not expand the trade war, and the trade war that has been conducted before will continue: the first batch of 25%tariffs imposed by the US $ 50 billion in China, the second batch of US $ 200 billion in China10%of the tariffs levied will continue to be maintained; of course, the first batch of US $ 50 billion products to the United States, the second batch of tariffs on US $ 60 billion in US $ 60 billion will also continue.Therefore, the two sides only agreed not to exacerbate the trade war, did not stop the fire, and did not have a final battle.

(2) The two parties do not exacerbate the trade war are only temporary and conditional.

The two sides agreed to negotiate with the structural reforms of the United States' concerns, intellectual property protection, non -tariff barriers, network invasion and theft, service and agriculture, etc., and strive to reach an agreement within 3 months; if an agreement cannot be reached, the agreement cannot be reached.According to the original plan, the US side will increase the tariff rate of US $ 200 billion in export products to China from 10%to 25%.

This shows that the two parties do not expand the trade war are only temporary, and they are conditional: China must make concessions by the United States in the structural reform that the United States is concerned about within 3 months;Further expand MDash; MDASH; the United States will not only increase the tariff rate of US $ 200 billion in export products on China, but also impose tariffs on China's remaining US $ 267 billion products.

2. The two parties have not reached important consensus on structural reforms, and the trade war may continue and expand

The decision of the temporary nature of the two sides without exacerbating the trade war can be said to be a consensus, but it is difficult to say that it is an important consensus.This is because the two sides have not yet achieved any important progress on the structural reform of the United States and reached an agreement. The root of the trade war has not been resolved; if the two parties cannot reach consensus in the structural reform of China, the trade war will continue to expand or even expand.

(1) In terms of structural reforms mentioned in the US statement, the two sides have not reached a consensus, and there will be a consensus part of the hope part in the future, and the biggest difficulty is the transfer of compulsory technology.

The structural reform mentioned in the US statement includes five aspects: forced technology transfer, intellectual property protection, network invasion and theft, non -tariff barriers, services and agriculture.The latter two aspects (reducing non -tariff barriers and relaxation of service industries and agricultural products market access) are reducing trade barriers.It is easier for China to take practical actions in these two aspects and make important compromises.It is estimated that the two parties will be more likely to reach an agreement in the future.

The first three aspects (stop forced technology transfer, strengthen intellectual property protection, stop network invasion and theft) belong to the broad sense of strengthening intellectual property protection.Among them, in the narrow sense of strengthening intellectual property protection (such as cracking down on piracy and other infringements), China is easy to take some practical actions; in terms of stopping network invasion and theft, China has always denied network invasion and theft in public, but it is estimated that it will be possibleStrengthen control in this area.It is estimated that the two sides and future negotiations will be more likely.

The biggest difficulty of reaching consensus and consensus between the two sides is the issue of forced technology transfer.The two sides are controversial on this issue.China has always claimed that the Chinese government has not forced foreign parties to transfer technology in the process of joint venture cooperation between Chinese and foreign companies; while technology transfer based on voluntary principles between enterprises cannot be called forced.

From the perspective of the United States, the long -term market -changing strategy of China's market -changing technology is the coercive technology transfer under the guidance of the government, which has a significant guiding role in Chinese enterprises; in particular, the behavior of state -owned enterprises is directly controlled by the government to reflect the government's intention; the United States; the United States; the United States; the United States; the United States;The technology transfer required by Chinese companies is not voluntary, but forced.

The dispute between China and the United States in this regard may be difficult to get fundamentally solved.China may actively remind or request that Chinese companies do not put forward technical transfer requirements for US joint ventures in the near future.However, if the Chinese government promises to force enterprises to not make this requirement in the future, it may not only violate the original intention of market technology, but also lead to the rebound of domestic enterprises and make them question where the benefits of cooperation with foreign companies.

In the future, how to solve this problem from the system in the future, how to accurately define, distinguish, and voluntarily distinguish between the two sides will continue to be the focus of controversy and test the wisdom of both parties.

(2) In terms of structural reforms that are not mentioned in the US statement, the issue of state -owned enterprises and industrial subsidies, the two parties have not reached a consensus, and it is difficult to reach a consensus in the future.

In the US statement, it did not mention an important structural reform issue that it has always been concerned about, that is, China's state -owned enterprises and industrial subsidies.Many people may think that this indicates that China has adhered to its own bottom line and has not made concessions on important issues. It is a major victory in China.

The author believes that China does adhere to its own position on this issue, but the United States also adheres to its own position. Both parties have no concessions. The contradictions have not been resolved. It cannot be called China victory.

China has always adhered to the government -led development model.This includes not only adherence to the leading position of state -owned enterprises in the national economy, as well as the practice of supporting the development of strategic industry through industrial subsidies (the main target is state -owned enterprises).China may think that this is its own system and internal affairs, and its own development advantage. Therefore, this has always regarded this as the bottom line that cannot be negotiated and unavailable, and insisted on not giving up.

The United States insists that this development model of China violates the basic principles of the market economy and has formed unfair competitive advantages to companies in similar industries in the United States.The United States adheres to China to change, otherwise it will impose tariffs on products in China, thereby offset the advantages of China's subsidies.

From the US statement, it is impossible to see whether the two sides talk about this issue this time.Moreover, the United States has not regarded this as a condition for whether to upgrade the trade war in the next step (after 3 months).From this perspective, China does not really doconcession.However, the United States has not canceled the relevant taxation: The first batch of US side imposed tariffs on China's value of $ 50 billion in products. The products targeted at the products of Made in China 2025 planned, which is the most important object of China's industrial subsidy. This is this.The tax levy was not canceled.

Therefore, the two sides are still deadlocked on this issue, and China has not won.

In particular, from the actual effect, the United States insists on improving tariffs on products that China provides subsidies, which not only offset the competitive advantage (price advantage) brought by China through subsidies to relevant industries.The US government's pockets are actually losing money, and it is even more difficult to say that China has won.(Participate in the analysis made in an interview with the Associated Press on July 5th.)

China needs to conscientiously evaluate in the future to develop the actual effects of economic and strategic industries through state -owned enterprises and industrial subsidies, so as to determine the next negotiation position.The core issue here is to establish a reasonable judgment method and comparative standards: if other methods are used to develop economic and strategic industries, such as using private enterprises as the main body, implementing universal tax cuts, and allowing enterprises to decide which industry to develop according to their own judgment to determine what industry to develop.Will it achieve better results?(See the comment published by the United October 5th on October 5th.)

In any case, the contradiction between China and the United States on state -owned enterprises and industrial subsidies has not been resolved, and will continue to negotiate.In the future, the two parties will continue to conduct hard negotiations on this issue in the multilateral talks about the reform of the World Trade Organization in the bilateral talks in the future.This problem is not only a matter of concern to the United States, but also the concern of the European Union and Japan. It is the focus of several joint statements in the United States, Europe, and Japan. Therefore, it will definitely receive continuous attention in the multilateral negotiations on the reform of the WTO.

It can be expected that before China and the United States reached a substantial agreement on this issue, the United States not only will not cancel the tariff measures that the industry has implemented in China (at least the measures to maintain tariffs on Made in China 2025 planned products) may also be further further.Expand the trade war (including the tariff rate of US $ 200 billion in products in China, and tariffs on China's remaining $ 2670 products).

In short, not only did the trade war not stopped, but the possibility of continuing and even intensified is still very high.The market must not make too optimistic interpretation and assessment of this.

(Note: The author Yu Zhi is a professor of economics at the Business School of Shanghai University of Finance and Economics and a researcher at the Chinese Institute of Industrial Development. This article only represents the author's personal point of view.