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Let's hope US envoy will help improve trade ties

By Mei Xinyu | chinadaily.com.cn | Updated: 2017-06-29 10:28

Let's hope US envoy will help improve trade ties

Newly appointed US Ambassador to China Terry Branstad speaks to the media in front of his residence in Beijing, June 28, 2017. [Photo/Agencies]


Before landing in Beijing on Wednesday to serve as the new United States ambassador to China, Terry Branstad posted a video online about his top priorities, which include "solving" the trade imbalance between China and the US, and expanding people-to-people exchanges.

As the world's largest and second-largest economies, the US and China have accounted for about half of the world's total growth in the past decade. And Sino-US trade has had far-reaching impacts on the world market and global growth outlook.

As such, China and the US need to clear doubts about the trade imbalance, and build mutual trust. As for bilateral trade, it would be beneficial for both sides if the US could make good to the trade deficit. The two economies are too important for each other to fail, and a sound Chinese economy is vital to the US' economic health, and vice-versa.

But the US should not pin its hope on China alone to reduce the trade deficit. The US has a trade deficit mainly because its citizens don't have enough savings. And this lack of enough savings makes many Americans draw on the savings of other countries' citizens in order to live comfortably. And China cannot teach them how to save.

Perhaps the US needs to reform its welfare system, and cut its skyrocketing spending on defense and foreign affairs, in a bid to reduce its deficit on its balance sheet.

Some US analysts and institutions tend to blame "China's unfair policies" for the trade deficit. For example, the US Chamber of Commerce released a report, Made in China 2025: Global Ambitions Built on Local Protections, in March, which said Beijing is "intensifying preferential policies and financial support" for "domestic Chinese companies over foreign ones in certain sectors", and concluded that it was a main cause of the US' trade deficit with China.

Such claims are groundless and unfair. But the USCC report doesn't stop there. It also said that China's CyberSecurity Law is "local protection" in the cyberspace sector, just because the law mentions "promotion of secure and trustworthy internet products and services", and adds that the law has "the potential to create trade barriers in industries nominally open to foreign investment". It is ridiculous to link the law to trade barriers. The ultimate aim of the law is to keep hackers at bay and make cyberspace safer for all.

China has for long been the No1 manufacturing economy in the world and is home to diverse industries partly because it has built and maintained excellent infrastructure facilities. On the other hand, even many elites in the US and European countries say their inefficient social systems prevent poor infrastructure from improving. It's time the US took their complaints seriously and took measures to strengthen its manufacturing sector.

Despite their differences, however, China and the US have realized the importance of their ties and taken steps to prevent trade frictions from harming overall bilateral relations.

Hopefully, as an "old friend" of China, Branstad will fulfill his ambassador's role by helping peoples on both sides to better understand the reasons for the trade deficit and disputes.

The author is a researcher at the International Trade and Economic Cooperation Institute of the Ministry of Commerce.

 

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