China

YuqiXing

摘 要：For various reasons， the United States has provoked trade war. China has not taken measures directly against the US， only a symbolic response and implies that if the United States breaks out of the trade war， both sides will suffer losses. At the same time， for trade protectionism， Chinese government as well as Chinese multinational corporations are responding actively.

關键词：Sino-US trade war， trade protectionism， Chinese multinational corporations， Huawei

1. Reasons why the United States intends to launch a trade war against China

1.1. Direct Purpose： To force China to further open markets to the United States due to serious imbalances in Sino-U.S. trade

The Sino-U.S. trade pattern is currently China's goods trade surplus and service trade deficit， which reflects the comparative advantages of China and the United States. According to Chinese statistics， Chinas trade surplus with the United States in 2017 was $ 275.8 billion， accounting for 65.3% of Chinas trade surplus； according to US statistics， the US trade deficit with China in the year of 2017 was $375.2 billion， which accounted for 46.3% of the US trade deficit， and was higher than the sum of the eight countries ranked second to ninth （44%）. There are significant differences between China and the United States in terms of trade statistics. In 2017， the difference between the two countries was nearly 100 billion US dollars. According to the statistics of the China and the United States Statistics Working Group， the official statistics of Chinas trade deficit with China have been overestimated by about 20% each year. According to the "Wall Street Journal" report， the United States explicitly requested China to further open up the market and take concrete measures to reduce the U.S. trade deficit with China of 100 billion U.S. dollars. 【1】

1.2. In-depth purpose： Trying to repeat the trade war between the United States and Japan in the 1980s to curb the revival of China

In 2017， Chinas GDP reached US$12 trillion， equivalent to 63% of the US， and Chinas economic growth rate was 6.9%， much higher than the USs 2.3%. If we grow at about 6% GDP growth for another decade or so， that is， around 2027， China is expected to replace the United States and become the world's largest economy， returning to the top of the world. In this context， the United States has been trying to contain China's revival.

Historically， the United States has successfully suppressed Japan through trade wars. In the 1980s， U.S. trade representatives initiated a total of 301 items case investigations in Japan. Most of the procedures were based on the U.S. demands to improve trade imbalances. They almost all forced the Japanese government to make concessions and compromises， and voluntarily restricted exports， opened up markets， and increased foreign investment， direct investment and so on. Successfully prevented Japan from challenging the economic hegemony of the United States， and Japans response of the misguided policy led to the collapse of Japans asset price bubble and failed. 【2】

1.3. Trumps campaigns

Tax reform and trade protection are important parts of Trump's campaign promises. After promoting the tax reform in 2017， Trump put trade protection as an important issue in 2018 and this time provoked a Sino-US trade war. Moreover， 2018 is the midterm election year for the US Congress. In November， the United States will usher in the parliamentary mid-term elections， but in May it will enter the intensive voting period for the mid-term elections. Trump also intends to use the “trade protection card” to canvass voters. To continue to maintain the Republican position in the Senate and the House of Representatives and fight for future reappointments.

2. The possibility of Sino-US trade war is small

2.1. Sino-U.S. trade imbalance is not China's reason

The United States limits the export of high-tech products to China. The agriculture， energy， and high-tech industries are the most export competitive industries in the United States， but the United States has long restricted the export of high-tech products to China. Some US research institutions have found that if the United States relaxes its export control to China， the trade deficit with China can be reduced by about 35%.

Excessive consumption in the United States leads to low savings rates. The USs willingness to consume has always been greater than its willingness to save. The trade deficit in the world has become the norm. Chinas savings rate has been at a high level all year round， further widening the trade balance between the two countries.

2.2. China will not repeat the mistakes of Japan

The trade friction between China and the United States is very similar to the trade friction between the United States and Japan.

With reference to the nature of trade balances and frictions between the United States and Japan， the impact of trade frictions on Chinas trade balance is uncertain； for exports and the economy， with reference to Japans experience， we do not worry that the trade war will affect the long-term future of Chinas economy. But it will not be ruled out in the short term on negative impact on exports and fluctuations in economic fundamentals. [3]

China is currently making great efforts to prevent financial risks and macro-prudential management. In addition， the previous experience of Japans successful experience in trade warfare can still be referred to. The “Kigawa Report” is the initiative to drive the industrial transformation and upgrading policy. There are many words we are familiar with： adjusting the industry， structure， capacity reduction， expansion of domestic demand， increase trade with developing countries （Belt and Road）， etc.

2.3. China does not take the initiative to take measures directly against the US

Although the United States imposes a 25% tariff on 14 categories of 106 items such as soybeans， automobiles， and chemical products originating in the United States， and it imposes additional tariffs on $100 billion of Chinese imports. China only responded accordingly and did not take proactive measures.

Based on the above three reasons， combine today's trade between China and the United States is complementary and mutually beneficial. The result of the trade war can only be losses of both sides， so the probability of Sino-US trade war is small.

3. Chinas actively responds to trade protectionism

3.1. The status quo

China has a positive response to trade protectionism. The G20 Trade Ministers Meeting concluded in Shanghai on July 10， 2017， approved the "G20 Global Trade Growth Strategy." The meeting explicitly opposed trade protectionism and decided to extend the measures without adopting new protectionism. 2018. At the same time， China is cooperating with Europe to oppose trade protectionism.[4]

3.2. Future measures

（1） Accurately responding to US agricultural products， automobiles， airplanes， etc.， depreciate exchange rate， sell US debt， limit US corporate investment， and promoting peace.

Trumps protectionism began to take shape at the time of his election campaign. On April 6th last year， President Xi JinPing and Trump held the first meeting. The meeting finalized the economic and trade ties between China and the United States. The "hundred-day plan" for the negotiations， followed by Trump's visit to China in November signed a 250 billion investment and purchase orders. However， Trumps position afterwards was not friendly to China， and trade protectionism against China has continued unabated. In this case， the bottom line of our side will be set up， and we will clearly put forward our concerns to counter the United States. In November 2018， the United States will usher in the mid-term election of the National Assembly. We can fight against the industries and fields that have the majority of votes， and transfer from other countries， such as agriculture. China is the second largest export market for US agricultural products， accounting for 15% of US agricultural exports. The growers of these agricultural products are the key voters to help Trump win the election. At the same time， we can choose to devalue the exchange rate， sell US debt， and limit U.S. corporate investment and other countermeasures.

（2） Unit with the EU， Asia， Africa and other countries and regions， continue to develop the "Belt and Road"， continue to expand China's influence and strive for support.

The US contraction strategy （"US priority"） has provided China with room for expansion of its international influence. China has won international respect for climate issues and globalization issues. The “Belt and Road” initiative has brought other investments and trade opportunities for other countries. We should continue to promote the “Belt and Road” and at the same time transfer from the EU， Asia， Africa， and other countries to increase imports， and disintegrate the United States against some “exempt tariffs”. Wrap up and win the support of the international community.

（3） Cultivate independent innovation brands and promote industrial structure upgrade [5]

As a developing country with a relatively backward technology， Chinas technology research and development capabilities still have a certain gap compared with developed countries. China's export commodities have the characteristics of low technological content and single structure， and are basically labor-intensive. Under the background of the financial crisis， the export mode should be changed as soon as possible， from extensive exports to intensive exports， from the blind pursuit of export volume to the pursuit of product quality improvement. In addition， it will stop the behavior of low-price dumping and blind competition， accelerate the support and foster the export of goods with independent intellectual property rights and independent innovation brands， and vigorously increase the added value of commodities. Therefore， enterprises must improve their technological level as soon as possible， speed up industrial upgrading， implement brand strategy， continuously improve their ability for independent innovation， and enhance their competitiveness.

（4） Establish an early-warning mechanism to achieve pre-transformation of foreign trade protection

With the rapid development of Chinas foreign trade， foreign countries anti-dumping， special protection and technical barriers have continuously increased. Therefore， first of all， we should seriously study the foreign technical trade barrier system， anti-dumping investigation system and green barrier system， and summarize the experiences and lessons of domestic and foreign enterprises in breaking trade protection. Timely deliver relevant information to enterprises， issue early warnings， help and guide domestic companies to break through barriers to foreign trade protectionism. Secondly， inspection and quarantine agencies should actively use information advantages to enhance their ability to analyze the prices of exported goods and to promptly identify the signs of low-cost competitive sales， and provide reference for decision-making departments. [5] Finally， a list of sensitive products is regularly listed， cooperated with the customs and economic and trade departments， announce the minimum price of the relevant commodities， and establish a reasonable system for evaluating export commodities.

5） Give full play to the role of industry associations and safeguard the legitimate rights and interests of enterprises

In response to the ever-increasing trade friction China is currently facing， the enthusiasm of enterprises， industries， and governments in coordinating and responding should be fully utilized. The principle of “who respond， who benefits” should be adopted to encourage involved companies to respond actively to recapture the market； organize industry associations and actively respond to anti-dumping. At the same time， it is necessary to urge enterprises to strengthen their self-prevention awareness and apply for anti-dumping investigations in a timely manner. This requires studying the WTO rules， drawing on foreign experience， improving Chinas anti-dumping， anti-subsidy， and safeguarding measures systems， implementing rational and orderly protection， and avoiding certain domestic industries from being seriously damaged.

4. Measures by Chinese Multinational Enterprises to Deal with Trade Protectionism

4.1. Take Huawei as an example

In the future planning of Huawei， the U.S. market will no longer appear. The signal sent by Huaweis US layoffs is that it will end ten years of meaningless efforts for the US market， withdraw its position on the US market and give up on US politics. The relationship between the two parties should be opened in order to prevent the US government from issuing "close contact with the Chinese government".[6]

4.2. Other companies

If China and the United States break out of the trade war， the most affected should be the manufacturing industry of technological hardware （technical hardware， semiconductors， etc.）， the manufacturing industries that can consume （durable consumer goods and clothing， personal products， etc.）， and the manufacturing industries of medical supplies （equipment and consumables）， as well as banks， logistics， and retail companies that provide a variety of services for these companies. [7] These companies can take the following measures：

（1）Do not enter the U.S. market.

Because there is not much impact on the profits of Chinese companies， the demand for products from the United States to China is not great. Such as Apple and Huawei， because Apple's technology level is higher than Huawei， so Americans do not want to buy Huawei.

（2）Production of high-tech products.

Through technological research and development， improve the ability to innovate， produce high-tech products， and enhance the competitiveness of enterprises.

（3）Self-protection through legal means.

In the face of trade protectionism， Chinese multinational companies should take legal measures to protect their own interests， for example， apply to the WTO for protection， in order to avoid unnecessary losses.

Summary

Through the above analysis and demonstration， in the future， the possibility of a trade war between China and the United States is small. The Chinese government and Chinese multinational companies will adopt a series of measures to actively respond to trade protectionism.

Reference

[1] Ren Zeping， Causes， Influences， Prospects and Responses of Sino-US Trade Wars ，2018.03.24， http：//news.ifeng.com/a/20180324/57017874_0.shtml

[2] List of the Measures and Reasons of Trump's Trade War with China in 2018，2018.03.23， http：//www.mrcjcn.com/n/263130.html

[3] Will the Sino-U.S. trade war repeat Japanese stories？， 2018.04.01 http：//www.sohu.com/a/226914760_481520

[4] How does China's exports respond to the frequent trade protectionism？， http：//money.163.com/16/0714/05/BRTN117S00253B0H.html

[5] Current China's Strategic Options to Deal with New Trade Protectionism， http：//www.wendangku.net/doc/3481bbbd1a37f111f1855bf4-2.html

[6] Huawei has abandoned the US market， http：//bbs.tiexue.net/post_13003922_1.html

[7] Which industries will be affected by the Sino-US trade war？， https：//www.zhihu.com/question/63930381/answer/215085211