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Trade war unlikely between China and U.S.

Sunday,Feb 05, 2017

From: People's Daily Online


Trade war unlikely between China and U.S. after Trumptakes office: seminar

The incoming U.S. president Donald Trump adds more uncertainty to the Sino-US relations, but Trump’s aggressive remarks on economics and trade would not bring about a trade war between the two economic giants, which would otherwise make both suffer, experts warned prior to Trump’s inauguration on Jan. 19.

According to a report compiled by Center for China and Globalization (CCG), eight challenges await China after the U.S. enters a new era, as Trump intends to withdraw from Trans-Pacific Partnership (TPP) and renegotiate international free trade systems and use tax policy and other financial measures to encourage US enterprises to move back to the States, among others.

Addressing a seminar where the report was published, CCG director Wang Huiyao added that Trump’s cabinet has also seen more hawkish nominees on economics and trade.

Even so, there would not be a trade war between the two countries, while trade conflicts may be unavoidable, according to experts at the seminar.

He Ning, former department head on American and Ocean Affairs at the Ministry of Commerce, pointed out that economics and trade are the motivator and bedrock of Sino-US relation and Trump is in need of the world’s second largest economy to help realize his pledges in jobs and trade.

“Once Trump is sworn into the White House, he will be restricted by the US political system that works to seek benefits for different interest groups for the most of the time,” He said.

“The U.S. would sure suffer more even if there was such a war, since it would lose millions of jobs – to the contrary of what Trump had promised – as well as the loss of major business deals, such as with Boeing. It would also lose the opportunity to tap into a third market together with China, for example along the Belt and Road initiative,” said Chen Wenling, a chief economist at China Center for International Economic Exchanges.

China and the U.S. are the largest community of shared interests when it comes to economy. With bilateral trade and investment worth billions of dollars, it is basically impossible for them to cut off the ties, Wang stressed.

In response, the report suggested that more focus may be on state governments in the U.S., which are more inclined to maintain close economic ties with China than fight over political conflicts. It also emphasized on the role multinational companies could play in stabilizing the bilateral ties.

President Alan Beebe from the American Chamber of Commerce in China echoed the report with the chamber’s latest survey on US enterprises in China, which saw more enterprises regard bilateral ties as “extremely important” or “important.” However, the survey also found a declining confidence in the bilateral ties under the new presidency, as only 17 percent of the enterprises said they believe improved ties after Trump took office.

As to whether US companies would answer to Trump’s call to go back to the States, Beebe said at the seminar the average US enterprises act rationally and in line with their best interests, but they also value predictability the most. (By Jiang Jie)

From People’s Daily Online, 2017-1-19