Yu Zhi: China should boldly give up in terms of economic and trade policy with subsidies as the core; and for the United States' strong buying and strong selling requirements, it should be kept, without concession or less retreat.
The Sino -US leaders at the G20 summit, which will be held at the end of November, can solve the trade dispute between the two parties, which has attracted much attention from the international community.Recently, the two sides have prepared a lot of preparations for the meeting.The United States claims that China has provided more than 400 positive reply lists on the US demands, but did not meet the requirements of the United States on the other key 4-5 items.
According to media reports and speculation, the US demands that China agreed on the side may include increasing procurement for the United States and reducing domestic market barriers (including commodity and services entering the barriers), and the U.S. request may include the cancellation of industrial policies, especially in Made in China 2025 in 2025 in China 2025.Subsidies, etc.This speculation is that the Chinese side, which is in line with media reports in the first half of this year, has a consistent position on retreating and guarding in China -US negotiations.
The author believes that: Starting from the multiple goals of solving the core dispute between Sino -US trade friction, the rational rules of international economic and trade, and safeguarding China's own national interests, the Chinese government should adjust the choice of retreating and guarding in the U.S. negotiations.Structural reforms, and the requirements of the United States' strong buying and strong sale should be kept, without concession or as little as possible.
1. From the perspective of solving the core dispute between Sino -US trade friction
First of all, the core attention and demands of the United States in the Sino -US trade negotiations have shifted from increasing transactions to structural reform in the first half of this year.U.S. Treasury Secretary Mnuchin pointed out in May this year: Although the United States also hopes that China will increase the purchase of commodities (increase transactions) in the United States, its focus is to hope that China will change the unfair trade policy (structural reform, including reducing import barriers to import barriers, including reducing import barriers to import barriers., Reduce export support, strengthen intellectual property protection, etc.), because the United States believes that this is the root cause of the imbalance of trade between China and the United States; the United States believes that as long as the unfair trade is resolved, American products have sufficient competitiveness and can solve the problem of US trade deficit.In other words, the core demands of the United States are not short -term cure, but long -term root causes.
Secondly, the core reason why China and the United States have failed to reach an agreement in the past in the past is that the solution proposed by the Chinese side is to increase transactions, that is, expanding the purchase list from the United States, and the response to the US's structural reform demand is insufficient: only responded to it, only it responded to it.Reduce import barriers (including reducing the import tariffs and service industries in the import of goods), and did not respond to its reduction of export support (especially industrial policy subsidies) and intellectual property protection parts.From the perspective of the United States, it is difficult to accept it to avoid weight and treat the standard.In order to solve the core dispute between Sino -US trade frictions, China should face the core demands of the United States.If you walk around the periphery, you can avoid the heavy, and it is difficult to resolve the dispute between the two parties.
In short, since the United States believes that the core reason for the imbalance between Sino -US trade is the Chinese economic and trade policy, in order to solve the friction between the two parties, the most effective response of China is to adjust the economic and trade policy, instead of accepting it, or as much as possible to accept the requirements of the United States to increase commodity procurement.Let the United States seek benevolence and see if this is possible to solve the problem of uneven trade in China and the United States.If the effect is not satisfactory, there is no reason to blame China again.
2. From the perspective of maintaining reasonable international economic and trade rules
The core of the international economic and trade rules implemented by the World Trade Organization (WTO) is trade liberalization, that is, as much as possible to eliminate the government's intervention in international trade: it is necessary to reduce or eliminate the government's tariffs and non -tariff barriers set by the government.Reduce or eliminate direct support (export subsidies) or indirect support (production subsidies and R & D subsidies) provided by the government in export.
First of all, in terms of imports, WTO has given developing countries preferential treatment, allowing higher trade protection than developed countries, but this discount should gradually decrease with the improvement of development.With the improvement of China's development level, China should further reduce trade protection.This year, China has announced several times to reduce tariffs on imported goods and reduce foreign investment in the service industry into barriers, which is worthy of recognition.
However, the behavior of a country's coercion to purchase its own products obviously belongs to the government's intervention in trade and does not conform to the spirit of free trade at all.Therefore, in the United States requesting China to purchase US products in certain industries, China has completely rejected reasons to refuse, or accept it symbolically and as little as possible.Whether to import, import, and how many American products should be decided by Chinese enterprises, and the government cannot be forced by the government.In the previous negotiations, it is unnecessary to make major concessions in this regard.
In addition, China has just held the Import Expo recently, and it is promised to be held for a long time.Although this expresses China's willingness to expand import and open to the outside world, it has its positive side, but it is actually unnecessary, and some specific practices do not conform to the spirit of free trade.If a country wants to promote free trade in imports and reduce or eliminate import barriers, there is no need to host the import expo to help foreign promotions.There are no import expo internationally in the world, and innovation in this area is not necessary.From the perspective of specific practices, the China Import Expo has the target of scheduled imports. Many local governments and enterprises have participated with import tasks and indicators, and the official also announced the import targets of the Import Expo in the future.These are the planned economic practices. It is not advisable to violate the spirit of free trade and add unnecessary obligations to themselves.
Secondly, in terms of exports, the WTO subsidy and anti -subsidy agreements oppose all forms of subsidies, and have not given special discounts to developing countries.The subsidies stipulated in the agreement include not only direct subsidies (fiscal funding), but also various indirect subsidies (government holding, tax reduction, price support, loan support or guarantee, raw material provision or product acquisition, etc.).Export subsidies directly based on exports are prohibited subsidies (red lines).Industrial subsidies (including production and R & D subsidies) are complaint subsidies.Take anti -subsidy measures.Therefore, industrial subsidies do not belong to one country's internal affairs and should be subject to the constraints of international economic and trade rules.
The Chinese central government has not provided direct export subsidies, but many local governments have it and should be cleaned up and canceled.As for industrial subsidies, they exist from central to local and localities. According to international economic and trade rules, a large amount of reduction should be reduced.Some people believe that there are also industrial subsidies in Western countries, so China's industrial subsidies are understandable.However, it should be seen that the industrial subsidies of Western countries mainly exist in agriculture and a small number of industrial industries, while China exists in many industrial industries, almost omnipresent, and its coverage and subsidy are much higher than that of Western countries.
Although it is difficult for China to completely cancel industrial subsidies, it can be achieved in a large -scale and significant reduction in industrial subsidies, which can match it with the industrial subsidies of Western countries.At the same time, industrial subsidies in Western countries, if they violate the non -specialty principles of WTO and their products are exported to China and harm the interests of Chinese manufacturers, China can also implement counterfeit subsidies.
3. From the perspective of protecting China's own national interests
The Chinese government used to be unwilling to make concessions in reducing and canceling various direct and indirect subsidies, mainly based on the consideration of promoting export and development strategic industry.However, these two considerations are not thoughtful.
First of all, long -term dependence of industrial subsidies or even direct export subsidies to promote outThe foreign trade strategy has led to many problems: the trade targets are distorted (exports and exports are far exceeding imports for exports), trade conditions have deteriorated (excessive export product supply and decline in export prices), inflation is intensified (exports to many exports, small imports have led to leaving less imports leading to leaving less imports.Insufficient domestic supply, rising prices), increased risk of foreign exchange reserves (risk of depreciation of reserves), high dependence on external markets, frequent trade frictions, and so on.
It should be pointed out that relying on subsidies to promote exports are not conducive to the overall interests of the country: Although subsidies are conducive to exporting companies in the country, it is not conducive to domestic consumers (reducing domestic supply and raising domestic prices), and the government pays direct costs.Economics theory has proven that the benefits it brings to export companies is less than the losses caused by consumers and the government, so its impact on the overall interests of the country is negative.
In addition, in order to cope with trade frictions, increase export tax refund in response to trade frictions, and let the RMB depreciation (whether there are subjective motivations), it is also a disguised subsidy for exports, which is not conducive to the overall interests of the country.These measures are exported to export, which has deteriorated China's trade conditions, so that China needs to export more products to replace the same number of imported products, which is not good for the overall interests of the country.
Secondly, the industrial policy (including Made in China 2025), which has long -term dependence on industrial subsidies, has not played a good effect, but instead has caused many problems of the subsidized industries and enterprises: low efficiency or even false efficiency, overcapacity and externally dumping of external dumping, Unfaithful competition (relative to other industries and enterprises), corruption (corporate bribe officials to obtain subsidies) and deception (corporate fraudulent state subsidies), and so on.
It should be pointed out that it is difficult to rely on subsidies to produce real competitiveness, and may even produce false competitiveness.For example, China once provided a lot of subsidies for the new energy vehicle and robotics industries, but the actual international competitiveness of these industries is not very strong, far from Japan and the United States.For another example, China once provided a large amount of subsidies for the photovoltaic industry, causing overcapacity, dumping to many countries in Europe and the United States, occupying the international market, and it seems to be very competitive; but this is a false competitiveness.; In the first half of this year, due to the pressure of the Sino -US trade war, the Chinese government canceled subsidies, and the profit of many photovoltaic companies immediately declined, and it was even difficult to maintain. ThereforeCompetitiveness.
All of this shows that relying on subsidies to promote exports and promote the development of strategic industries, there are many problems for China itself, which is not conducive to the overall national interests.Even without the pressure of trade war in the United States, China itself should be adjusted: it should vigorously reduce the government's deliberate support for exports and promote trade liberalization; and vigorously reduce industrial subsidies and rely on market -oriented measures (such as universal tax cuts).Enterprise develops a strategic industry independently.(See the author of the author's series of comments on this issue)
Fourth, conclusion
In summary, China should adjust the choice of retreating and guarding in the U.S. trade negotiations. It should be boldly refunded in terms of economic and trade policies with subsidies as the core.Return less.This is not only conducive to resolving the core dispute between Sino -US trade friction, but also conducive to maintaining the rules of free trade, and truly safeguarding China's own national interests.
(Note: Author Yu Zhi is a professor of economics at Shanghai University of Finance and Economics. This article only represents the author's personal point of view.
