中國新聞


China is ready to meet the costs of the trade warChina Plus

[2018-07-10]
Published: 2018-07-10 14:51:11Comment Share

Note: The following is an edited translation of a commentary on the
U.S.-initiated trade dispute from the Chinese-language "Commentaries on
International Affairs (国际锐评)".

China and the United States will inevitably both pay a price as they enter the biggest trade war in the
history of the global economy. The United States' additional tariffs on
34 billion U.S. dollars worth of Chinese imports will have an impact on
some Chinese enterprises. It will also impact on the lives of their
employees. China's government anticipated this, which is why it didn't
want to see a trade war start. But now that it has, China will fight it
to the bitter end. 

On Monday evening, a spokesperson for China's Ministry of Commerce announced new policies that aim to relieve the
impact of China-U.S. trade frictions. The policies include continuously
evaluating the impact on the dispute on different kinds of companies;
using the income raised by China's countermeasure tariffs to relieve the
impact on affected companies and their employees; encourage companies
to restructure their imports; and, step up the implementation of the
State Council guidelines on the effective use of foreign investment.
Taken together, these measures demonstrate China's strong capabilities
in risk control and underlines its determination when it comes to
fighting the trade war. 



A crane vehicle unloads soybeans imported from Brazil on the quay of a
port in Nantong city, east China's Jiangsu province, 4 April 2018. [File
Photo: IC]

Of course, China will face losses. And although the losses may be minor relative to China's economy as a whole, it will
likely be a big blow to some individual enterprises. But China's
government has said that it will try its best to limit the negative
consequences. For example, evaluating the impact of the dispute on
different companies, and using tariff income to offer relief to the
affected companies and their employees, are direct and effective ways to
help enterprises and its employees deal with their losses. Encouraging
companies to restructure their imports helps to support their long-term
development by diversifying their trade partners and in doing so
splitting the risks. And China's Securities Regulatory Commission
announced on Sunday that it would allow more foreigners to trade
A-shares, in a move to further open capital markets and in doing so
further prepare the economy for the trade war against the United States.
As the trade war has just started, there are still many uncertainties,
and China should be ready to change its countermeasures in a timely
manner, so that these countermeasures can continue to effectively
minimize loses.

Can China really afford the cost of the trade war? It has the world's broadest domestic economy, and enjoys a huge
consumer market with 1.4 billion people. This means that China's economy
can absorb blows even in the hardest of times. Meanwhile, 91 percent of
China's economic growth derives from domestic demand, and 60 percent of
it is driven by consumption. Its innovation-driven development brings
resilience to its economy. And its opening up policy is continuing to
spur growth: The 2018 Business Climate Survey recently released by the
American Chamber of Commerce in China has revealed that 74 percent of
its members plan to expand investment in China, the highest level of
planned expansion in recent years.

The United States has long been mulling over launching a trade war not only so it can reduce its
trade deficit, but also so that it could hamper the development of
China's high-tech sector at its roots. In doing so it has even attempted
to force structural reform on China's economy to divert the path of the
country's development. And so, the trade war with America is a fight
for China's destiny. Its people and government are willing to make
sacrifices, overcome difficulties, and make a concerted effort to
safeguard the country's sustainable economic development. That's why
China can be confident as it heads into battle.


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