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China-US trade has benefited both countries: report

By Ren Xiaojin and Zhong Nan | | Updated: 2019-06-06 14:33

China-United States trade has been mutually beneficial, and the US has reaped substantial benefits from bilateral economic and trade cooperation, the Ministry of Commerce said on Thursday in a research report.

"China-US economic and trade cooperation has reached unprecedented depth and breadth," said the report, noting that bilateral trade surged last year by roughly 252 times since 1979 to $633.5 billion.

Bilateral trade in services exceeded $125 billion in 2018, and two-way direct investment has totaled nearly $160 billion in the past four decades.

Since the current US administration came to power, it has ignored the mutual economic and trade cooperation between two nations, said Gao Feng, the ministry's spokesman.

The US has propagated the "loss" of US trade with China and uses the deficit as an excuse to provoke economic and trade friction, he said, stressing that the study is based on concrete facts and figures to reveal the nature and causes of the deficit.

The report, Gao said, shows that the US has made great profits from trade with China.

China's surplus comes mainly from labor-intensive products, and the country saw deficits for products including aircraft, integrated circuits, automobiles and agricultural products, showing both countries have capitalized on their respective industrial advantages, according to the report.

"Strict control of the US over exports to China is one of the important reasons for the trade deficit," the report read, adding that US export control measures involve around 3,100 items in 10 categories, including mostly high-tech products.

If the US were to liberalize its export barriers against China to the same level as those applicable to France, the US trade deficit with China would narrow by a third, the report said, citing analysis from the US-based Carnegie Endowment for International Peace.

The US trade deficit in goods is no objective truth, and this deficit is caused by export control and market restriction, which are also affected by market competitiveness, trade policies, the currency reserve status of the US dollar and other reasons, Gao said.

Even though China has a surplus, the same interests are shared by both sides, Gao said.

"The profits US companies gain from bilateral trade have been increasing steadily since 2007.

Indeed, China does claim a huge surplus during trade with the US, but behind that, the companies from the US also owns large surplus in profits. It has been a win-win situation," said Huang Qunhui, an industrial economics researcher at the Chinese Academy of Social Sciences.

Huang pointed out that the current global industrial chain was formed under the dominance of multinational companies mainly from the US, and the US has been taken advantage of this.

"Now that China has also benefited from the global value chain, the US government has started to accuse it of being unfair. It is classic bullying," he said.

Huang said the escalating trade war will eventually hurt US companies, as China is an important and irreplaceable part of the global value chain.

"China has been the only country that is able to manufacture a wide range of industrial products. In fact, China was the world's largest manufacturing country for over 220 out of 500 kinds of major industrial products," he said.

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