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China's industrial policy is aimed at rapidly expanding its high-tech sectors The plan is seen as a threat by President Trump, and could escalate the trade war. only the U.S. economy but also the global innovation system as a whole.” . the WTO process could challenge and eventually reform China's.
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- U.S. Trade Policy in North America, China, and Beyond
- Is ‘Made in China ’ a Threat to Global Trade? | Council on Foreign Relations
Instead, a trade deal between the two countries seems more likely to bring change around the margins — tens of billions of dollars of soybean purchases, some tariffs lifted and changes to the text of Chinese laws or regulations that the country might ultimately disregard, particularly once another administration occupies the White House. Many in China see the United States as a declining power bent on enforcing its will on a world that no longer cowers before its hegemonic might.
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The troubles in American democracy and the long economic slump after persuaded many in China that its instincts to chart its own course were correct. In the eyes of many Chinese, their country is simply reclaiming its historic status as a dominant regional power in Asia. It has also projected power across Asia, Africa and elsewhere while the United States has, on many fronts, retreated from its post-World War II commitment to the global order.
But it has done so with little application of military force, in sharp contrast to what many in China see as American militarism. But they have long thought the United States would have a difficult time accepting a true peer in economic, technology and military power, so consider the management of conflict with the United States to be an inevitable result of their own rise. Many of the changes the United States seeks would limit what Chinese officials regard as a tried-and-true approach of using tens of billions of dollars from state-owned banks and government investment funds to turn previously small industries like car production or solar panel manufacturing into the largest industries of their kind in the world.
To the increasingly nationalistic public in China, the American requests are reminiscent of 19th century history of unequal treaties forced on the country by foreign powers.
That is a significant shift from the prevailing view in the United States since the death of Mao Zedong in that close economic engagement with China would produce an increasingly democratic country that would be closely tied to an international economic order founded mainly on Western liberal ideals. China has indeed grown in prosperity, leaping into the ranks of what the World Bank defines as upper-middle income countries. Its economy is now bigger than any other country except the United States. Its manufacturing sector is now bigger than those of the United States, Germany and South Korea combined.
But in the last five years, China has veered toward increasingly repressive authoritarianism at home and a rapid military buildup. The State Department estimates that Beijing has put , to two million Muslims in hastily built internment camps ringed with barbed wire in northwestern China. The Chinese government has built an archipelago of air bases on artificial islands in the South China Sea in between Vietnam, Malaysia, Indonesia and the Philippines. On the economic front, the competition is even fiercer.
Trump administration officials warn that China is trying to dominate the global 5G infrastructure that will be the basis for future mobile communications and is competing to set other technological standards that will determine which global companies win. China is extending low-cost loans and building infrastructure around the globe through its One Belt, One Road program, which critics warn is making poorer countries beholden to China. A new round of reform and opening up would also address the complaints of the Trump administration and the U.
In order to achieve this win-win outcome, the trade agreement currently under negotiation between the two countries must involve more than just dramatically increased purchases by China of U. There is strong support for this agenda of structural reform across the U. There appears to be a struggle within the administration for the mind of U. President Donald Trump on this issue—with many including U. Trade Representative Robert Lighthizer arguing strongly that the trade agreement must not only involve structural reform but also contain a real enforcement mechanism to ensure that China complies with its commitments.
Indeed, some argue that current U. Only with real structural reforms will the Chinese economy be able to continue to contribute to global economic growth and will the two nations be able to resolve the trade issues that now hold hostage the future of U. The threat of increased tariffs and a weakening Chinese economy has presented the Trump administration with a once-in-a-lifetime opportunity to make progress on these structural issues.
It must not let that opportunity slip away. But much will depend on the Chinese side.
Economic reform is in tension with the political agenda of Chinese President Xi Jinping, who has championed increased Communist Party control over almost all aspects of Chinese life. The question is whether Xi can be convinced to embrace economic reform and opening up that is broad enough, deep enough, and soon enough both to meet the needs of the Chinese economy for future growth and to satisfy the demands of Trump and the U.
To win this argument, Xi must be persuaded that political repression as an instrument for greater political control will ultimately be self-defeating because it threatens future economic growth. In this context, increased political repression risks threatening the very political control that Xi seeks to achieve. He needs to change course. Stephen J. Hadley is a principal of RiceHadleyGates.
He served as the national security advisor to President George W. Bush from to From to , he served as deputy national security advisor. Trending Now Sponsored Links by Taboola.
U.S. Trade Policy in North America, China, and Beyond
With U. Following a high court ruling that his suspension of Parliament was unlawful, the lame-duck British prime minister will have to confront a hostile Commons. Sign up for free access to 1 article per month and weekly email updates from expert policy analysts.
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Is ‘Made in China ’ a Threat to Global Trade? | Council on Foreign Relations
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