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International trade calls for rules, not hegemony


Source: Global Times    Published: 2018-3-26

China is not afraid of a trade war and is capable of fighting back with various means, Chinese analysts said after US President Donald Trump signed a memorandum imposing tariffs against China last week.

China is confident and capable of safeguarding its proper and legitimate interests under any circumstance, Chinese Foreign Ministry spokesperson Hua Chunying said during a daily briefing on Monday. "Now the ball is in the US` court, and we hope the US will make reasonable and cautious decisions and choices."

"The US should understand that in the 21st century international trade calls for rules, not hegemony. China has always followed WTO rules… and supported solving disputes through negotiations based on principles of mutual respect and mutual benefit," Hua said.

Trump imposed tariffs on $60 billion in Chinese goods and limited China`s ability to invest in the US technology industry last week.

"The era of economic surrender is over," said US Vice President Michael Pence.

Hua on Monday dismissed the term "US economic surrender" and called the tariffs "an economic threat and hegemonic."

"It`s very strange for the US to say its era of economic surrender is over. It sounds like putting Zhang`s hat on Li`s head," Hua said.

Li Haidong, a professor at the China Foreign Affairs University`s Institute of International Relations, told the Global Times China does not want to see a trade war, which would bring great losses to both sides, but China is not afraid of a trade war if it ever occurs.

The Wall Street Journal reported on Sunday night that China and the US "have quietly started negotiations on expanding US access to Chinese markets."

"The reported negotiation might be because both sides want to avoid a trade war," Li said, "But it is also very likely that Trump will ask for big compromises from China, which will lead to a negative result."

It seems that the US tends to take advantage of a trade war to promote negotiations, as shown by exempting Canada and Mexico from steel and aluminum tariffs, He Fei, a senior research fellow with Bank of Communications, told the Global Times on Monday.

"It`s believed the US will return to the negotiating table. China, for its part, should still be defensive and well-prepared for a counterattack."

The move by the US against trade with China is partly the result of the US` policy on China, but it also reveals Trump`s unorthodox diplomatic policies, which are unreasonable and short-sighted, Li said.

"The Trump administration seems addicted to the concept of a trade war, as if it were a drug," Li noted.

China ready to respond

Since China and the US share broad and deep connections in trade, China would be capable of responding to US tariffs in various sectors, such as agriculture, aviation and high-technology, Li noted.

China could seriously weaken the US by imposing tariffs on 128 goods from the US. Beijing could also allow currency depreciation and sell off some of its vast holdings of US treasury bonds, which are worth more than a trillion dollars, said Dong Ximiao, a research fellow with the Chongyang Institute for Financial Studies at the Renmin University of China, according to a People`s Daily report on Monday.

China is in the process of remodeling its trade structure, He Fei noted, adding that a shift toward more innovative, high value-added products is one of the primary tasks facing the country, as trade conflicts between China and the US may become more frequent in the future.

Bucking the Friday trend of a selloff of US shares, mainland shares rebounded on Monday, with more than 2,400 of nearly 3,200 stocks closing higher, buoyed by signs of renewed negotiations.

The Shanghai Composite Index ended down 0.6 percent during the day, while the Shenzhen Component Index closed up 1.19 percent and the NASDAQ-equivalent ChiNext index up an impressive 3.16 percent on Monday.

Dong Ximiao is a senior fellow of Chongyang Institute for Financial Studies at Renmin University of China.

Key Words:China   US   trade   Dong Ximiao  

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