The industrial setups of China and the United States remain highly complementary despite their ongoing trade spat, says a Chinese mainland economics expert.

Zhao Changwen, director-general of Department of Industrial Economy at the State Council's Development Research Center, said whereas China's industries are mostly low-to-middle end, those of the US are, more often than not, upscale, leaving a natural gap for them to fill.

"It's something meant to happen at this certain point when China's industrial transformation and upgrading kick-starts," Zhao said on sidelines of the two-day forum "US-China Trade and Economic Relations: What Now, What Next" on Wednesday.

China's industries, needless to say, are moving up the value chain, but such an upward momentum doesn't necessarily mean it has contributed to the protracted trade spat between the world's two largest economies, he said.

"There's no suggestion that there's a link between them," said Zhao, adding that the trade structure eventually mirrors the industry structure. In terms of trade of goods, the US has a deficit with China, but when it comes to trade of services, the US simply runs a surplus.

"The trade surplus or deficit as we usually talk about today is essentially a barometer of how competitive a country's industry structure is," he explained.

At present, the core leverage of China's industries lies mainly with its comprehensive industry categories, and the tremendous scale of a real-world application scenario.

"China, as an immensely giant market, provides the innovations from the rest of the world with diversified scenarios for their desired applications," said Zhao.

"This kind of application scenario will determine whether advanced technology will ultimately be effectively marketized or commercialized," he said. "I think this is the most important one, especially for those in the middle and high-end categories in the developed economies. There's, actually, a huge potential for collaboration."

The gravity of the world's second-largest economy is massive, considering its great business environment, sufficient industry network, big domestic market, and momentous technological innovation, Zhao said.

"China's industrial chain edge that has gradually formed over the years has made it clear that no other country can replace it for a very long time period," he said.

On the other hand, any transfer or migration of industrial chain from China would not shift the paradigm in a fundamental fashion.

"It just would not hit our raw nerve as any of those industry chains moving outbound does not equal to the transfer of the most core technology," Zhao added.

kevindai@chinadailyhk.com

(HK Edition 07/11/2019 page15)