Could trade war become an opportunity for China?
Editor's note: The article is based on an interview with Dr John Gong, a professor at the University of International Business and Economics in Beijing.
Recently, a ship packed with 70,000 tons of US soybeans attracted international attention as it arrived off the coast of China on July 6 just hours after the country had imposed 25 percent import duties on 34 billion US dollars’ worth of US goods, including soybeans. The ship has been chugging in circles off the coast of China for a month and on Saturday it finally entered the port of Dalian. The Guardian has said the vessel is a victim of the escalating China-US trade war.
Dr John Gong, a professor at the University of International Business and Economics, has some sympathy with this view. "The American soybean is a very good product, it’s becoming hijacked, becoming a victim of this trade war, of Donald Trump's tariffs. This is actually very unfortunate," he said, describing the situation as a lose-lose game.
Given the fact that China can import soybeans from other countries and soybeans are mainly for making edible oil which can be got from other substituted crops, the American soybean farmers will be hurt as Chinese consumers change their choice.
Also, Trump's trade war could unintentionally become a positive opportunity for China. It will reduce the Chinese market's dependence on US soybeans, and make it easier for Chinese consumers to switch to local soybeans. The total imports of China from the US are about 500 billion dollars, only about 2 percent of China's GDP.
Gong said that companies in China will focus more on the domestic market which is much bigger than the American market or other international market and they are not supposed to rely exclusively on the US market. And that actually provides opportunities for Chinese companies to be less reliant on a particular source and to be more diversified. In this sense, it is not a bad thing.