China-US High-Tech Competition,Trade Conflict and Development Rights

The power and interest of industrial manufacturers are determined by their status in the relations of production.At the international level,countries see their economic and political status rise only when they climb the ladder in the international division of labor.As the primary production forces,science and technology are the main drivers behind such change.As new technologies give rise to new industries and restructure the international division of labor,developed countries strive to enhance the protection of their intellectual property rights(IPR)and safeguard their monopoly over core technologies.For developed countries,technological prowess holds the key to their supremacy in the global supply chain and international relations.The 19 th CPC National Congress makes clear the overarching goal in the new era is to rejuvenate the Chinese nation and turn China into a strong modern country.As an important material condition for achieving this goal,China must transition from being medium-and low-end links in the international division of labor to becoming high-end links.In this process,China will encounter backlash from developed countries that lead in the international division of labor.The recent China-US tussle over trade in high-tech goods is a case in point,and should be viewed through the lens of the relations of production and the international division of labor.The insights thus achieved will be of great significance to China’s future development.

US economic and trade sanctions against China: A loss-loss confrontation

The economic and trade sanctions implemented by the United States(US)against China have lasted for a few decades and the structural imbalance of the US–China trade relationship has ultim-ately been escalated to a trade war recently.We examine the eco-nomic impacts of US sanctions against China on both sponsor and target countries during the last 20 years.We find that such impacts have significantly changed over time.On one hand,US economic sanctions have gradually extended from China’s labour-intensive to high value-added products and they have largely slowed down China’s trade growth for the last decade.On the other hand,US consumers and businesses have faced higher pri-ces and production costs for Chinese imports(or import substi-tutes)in the wake of the increasing US trade sanctions,leading to great deadweight losses to the sponsor country.In addition,US economic and trade sanctions against China have largely impacted other economies involved in US–China trade as well.The intermediary status of the Hong Kong SAR has been greatly challenged.Overall,US economic and trade sanctions have caused pain on both China and the US,but their impact on China(the target country)has been largely weakened.

Past,Present,and Future:Research on the Influence of International Competition and Collaboration Relationship between US and China

“America has no permanent friends or enemies,only interests”,by Henry Kissinger.US and China have become the usual pattern of new international trade as the top two economic entities since 2010.After former President Trump took over the chair,the trade conflict between the US and other countries,especially China,has been sharpened to increase domestic employment.A new era of international competition on the economy has grown invincibly in a brutal way.This paper states and analyzes the economic development and historical interactions between China and the US,standing from China’s perspective.Four-time periods are introduced in the paper for China’s progressing procedure:1949-1978 pre-opening,1979-2000 post-opening,2001-2016 WTO period and focusing on the 2017-2021 deterioration.The methodology starting from industrial structure,trade deficit,monetary and fiscal policy.The key questions include;why China has faster growth,why the US tries to restrict China’s development,and its effective influence.The paper’s conclusion lies in the comprehensive prediction of the future economic relationship between China and the United States in the ongoing 50 years,yields to the world trade habits and potential international economic system revolution,demonstrated from three sectors:economic structure change and technical restrictions.

Understanding the China–US trade war:causes,economic impact,and the worst-case scenario

This paper studies the current trade war between China and the US from a historical standpoint.By comparing the ongoing trade war with similar trade conflicts in history,we reveal three major causes,with varying degrees of importance,from both economic and political perspectives.The trade war can principally be attributed to trade imbalances,the US midterm elections and rivalry over global economic dominance.As the fundamental conflicts between China and the US cannot be easily resolved,we hold a pessimistic view on the complete settlement of the trade war.In this paper,we perform a scenario analysis,which shows that in the worst-case scenario,China will suffer a 1.1%decrease in employment and a 1%GDP loss,which are not negligible,but manageable for China.

Can the Trading System Survive US-China Trade Friction？

Donald Trump has sought to change US trading relationships by raising protection at home and taxing the offshore activities of US companies abroad. These measures, which both use and violate trade rules, have provoked retaliation from other countries. Such friction has restricted and distorted trade and investment, undermined the rules-based trading system and perhaps permanently damaged global value chains that depend on stable rules for market access. Trump has justified some of his measures as a response to China＇s alleged unfair practices and indeed, China has adopted industrial and technology policies that are formally neutral between domestic and foreign firms but in practice have led foreign firms to complain about discriminatory practices that favor Chinese firms. The US friction with China is unfortunate because instead of trying to bully China into submission in a tariff war, the US could have dealt with many of its concerns more effectively by cooperating with other countries and taking actions that are consistent with maintaining the rules-based system. While the US has undermined its leadership role, the overall damage to the trading system could still be limited if other countries, especially China, take actions that sustain and strengthen it.

An analysis of the China–US trade war through the lens of the trade literature

The current China–US trade war that started in early 2018 has been the largest of this kind in the global market in the past half century,if not longer.Many speculations about the reasons for and progress and potential implications of the trade war emerge.Countries must understand the reasons for the war to avoid future trade wars.Predicting what will happen in the near future and the related economic consequences are even more important for people(including businessmen and government policymakers)to prepare for them and make corresponding decisions.However,endeavouring to predict is a tough job.This paper tries to provide an unbiased analysis through the lens of the trade literature.That is,we want to ask how much we can understand the current trade war on the basis of the accumulated knowledge we can obtain from our profession.Related theories include imperfect competition,increasing returns,terms of trade argument,distributional effects and political economy argument.

The future of global trade in the presence of the Sino-US trade war

The looming of a vindictive spirit owing to dishevelled trade relations amidst China and the US seems to be near.Never has it been so apparent than now.The US has had itself as the largest economy on the world stage and China’s attempt at shuffling this incumbency has led the US to open a tariff fire on Chinese imports.The tariff brawl appears to be not settling anytime soon as the retaliatory measures are swelling incessantly.Being the two largest economies of the world,giving in for disengaging trade with each other is bound to have a ripple effect on the global system of trade.Where the detesting to barrier-free trade on the part of the US and China are certain to inflict pain upon both countries,it might come as a benefit for other countries.This research explores the movement in global trade springing out of the Sino-US trade war.

The US–China trade war,the American public opinions and its effects on China

Donald Trump’s trade war with China does not make economic sense,but he does not face much domestic opposition to this trade war.Moreover,it is a part of a broader strategy of the nationalistic Americans’attempt to suppress the rise of China.Would China give in to the requests of the US under the threat of the escalation of the trade war?In what way?My conjecture is that China is willing to compromise up to a point.What China is likely to do is to promise to buy more goods and services from the US,allow greater market access for American firms,reduce Chinese subsidies to its industries,reduce forced technology transfers by American firms,strengthen enforcement of intellectual property rights protection and make verification all these commitments more transparent.Although the US might stop escalating the trade war,it is likely that the tariffs already imposed on Chinese goods would not be removed soon.In response to that,China also would not remove most of those tariffs already imposed on imports from the US,in keeping with the spirit of the tit-for-tat policy.It is possible that a temporary ceasefire is agreed,but the trade war can last for a long time.The final assembly stage of many industries might leave China,but not necessarily the whole production process.Hong Kong can be a victim of the trade war if it escalates.

A Trade War That is Unwarranted

The Trump Administration has presented three major reasons to justify the initiation of a China-US trade war： China＇s large trade surplus against the US, China＇s failure to comply with World Trade Organization （WTO） commitments and China＇s unreasonable acquisition of US technology and theft of intellectual property rights. The fundamental cause of the US trade deficit is its persistent saving deficiency. China has complied with WTO commitments, although there remains significant room for improvement. The case against China for the so-called unfair acquisition of foreign technologies and cyber-enabled intellectual property rights theft is weak at best, although China needs to redouble its effort in protecting intellectual property rights. President Trump＇s trade war will not drive China to abandon its resolve to catch up to the advanced economies. China is ready to fight a war of attrition. Unfortunately, both sides - as well as the rest of the world- will incur heavy losses in the process.

Why did Trump launch a trade war?A political economy explanation from the perspective of financial constraints

The existing explanations for President Trump’s decision to trigger a trade war with most of America’s trading partners are not sufficient.The less explored motivation,we argue,is to raise income for the federal government through tariffs in order to balance the surging fiscal deficit caused by Trump’s bold tax cut policy since December 2017.The repeated increase in interest rates by the Federal Reserve throughout 2018 is leading to sharp increase in the cost of servicing America’s US$21 trillion and growing debt,which means that debt servicing would soon become the biggest outlay of the US government.This new explanation implies that the US will need additional sources of income like tariffs in order to balance its budget,and tariffs on Chinese products is viewed as a main source of such income.China should,therefore,rethink its strategy in seeking a resolution for the trade war.

The effects of the China–US trade war during 2018–2019 on the Chinese economy:an initial assessment

The China–US trade war during 2018–2019 has attracted attentions from academics,policy makers,businesses and investors around the world.Unlike previous researches which are mainly based on hypothetical scenarios,this study looks at the real effects of the China–US trade war on the Chinese economy.Based on either weekly or monthly data during January 2018–December 2019 including creatively using the Google Trends data to measure the severity of the trade war,this study examines the effects of the China–US trade war on Chinese Renminbi,China–US bilateral trade and stock markets.

Stop the Trade War

Investment guru Jim Rogers warns that additional tariffs cannot succeed World-renowned investor Jim Rogers has said that he is not in favor of the decision of U.S.President Donald Trump to raise tariffs on Chinese goods,and has appealed to both sides to stop the trade war.

China and the United States： The Contest for Global Economic Leadership

This paper considers whether there is a ＂Thucydides trap ＂＇ in the world economy, referring to the inherent conflict between incumbent and challenger It assesses the impact of President Trump ~ alienation of traditional US allies, which threatens to splinter the ＂hegemonic coalition ＇＂ and even push China and Europe together, and his convergence toward some Chinese norms on trade and even polities. It outlines three possible systemic scenarios： a ＂GO＂ in which the US is no longer willing to lead but China is not yet able or willing, and whether such a （likely） regime will be stable or unstable; a new ＂G1, ＂＇ sooner or later, led by China; and a cooperative ＂G2 ＂＂ in which the US and China agree to share leadership. It traces the evolution of actual leadership initiatives of the two countries in recent years. It compares US and Chinese attitudes on key systemic issues and concludes with an appraisal of ＂＇an international economic order with Chinese characteristics, ＂＂ a worm in which the state plays a greater role relative to market economics, the rule of law defers increasingly to voluntary arrangements, and politics tilt toward central ~overnment control more than democracy.

The sky is not falling!

As of October 2018,almost half of US imports of goods from China are subject to new US tariffs at various rates,mostly at 10%until the year-end of 2018,when the rates were scheduled to be raised to 25%.These tariff rates will prove to be prohibitive for most if not all of the US imports from China.Assuming that US imports from China will be reduced by half,the initial direct real impact on the Chinese economy may be estimated at a loss of 0.43%of GDP.If indirect effects are included,the full real impact may be estimated at a maximum loss of 1.12%of Chinese GDP.These estimated impacts are relatively small and quite manageable.There is a possibility that the scope of the US tariffs may be expanded to cover all US imports from China,in which case the full negative economic impact will be doubled,but still leaving an expected rate of economic growth in excess of 4%.The Renminbi is not likely to be significantly devalued as a result of the trade war.However,there are also longer-term underlying forces at work behind the China–US trade war–the competition for economic and technological dominance and the rise of populism,isolationism,nationalism and protectionism.It is important for China–US relations,and China’s relations with the rest of the world,in particular with the European Union,Association of Southeast Asian Nations(ASEAN),Japan and Russia,to be carefully managed going forward.