China: How To Turn Trade Protectionism Into Passive Action In The US

Judging from the US trade policy indicators,

A comprehensive inspection of the four indicators of domestic industrial added value, the import volume of industry, the import and output ratio of industries and the number of employed persons will bear the brunt of the steel industry.

It ranks first in the two indicators of export growth and export to production ratio, and even in the ranks of the top five industries in the US.

The aggravation of external shocks, coupled with the serious internal atrophy, supplemented by powerful interest groups and lobbying traditions, will probably be the first to be favored by the US trade protection policy.

The oil and coal products industry, as well as the chemical industry, because its imports grew faster in a year, and domestic production or stagnation or slight decline, is also easy to cause trade friction areas.

Finally, the traditional labor intensive industries, such as furniture, including the wood and textile industries, are affected by the internationalization trend of outsourcing and direct investment. The vigorous development of these industries with abundant labor resources has a strong impact on the United States, and the ability of these industries to output and absorb labor in the United States is declining.

Increasingly dissatisfied workers and trade unions should not be overlooked by policymakers.

The analysis shows that the United States is most likely to choose steel, oil and coal products, chemical products, wood products, furniture and textiles as the object of trade protection in this crisis.

If so, China's chances of being selected as a target for steel products and furniture outside the furniture industry are very likely.

In general, although these industries in China are facing many American trade remedy measures at the present stage, they may continue to face more before the end of the crisis. Some enterprises in the industry, especially the steel industry, may be affected, but overall, the impact will be very limited.

Then, how should China deal with the partial trade frictions launched by the United States? From the perspective of trade theory, most of the cases, trade protectionism is harmful to the welfare of both countries.

Therefore, if the two countries can adopt more consultations and dialogues to enhance understanding and ease contradictions, it should be the most friendly and optimal solution.

If we take advantage of the investigation of trade remedy or reduce imports of us products, which industries should be selected to effectively combat US exports and effectively curb the US's continued protectionism?

The answer is that US exports depend heavily on China or industries that have been greatly relied on in recent years.

Leather products, petroleum and its products, and tobacco before the top three.

The leather products exported by the us to China account for 14% of the total export volume of the industry, and it has gained a good momentum in the past three years.

If such a rise is maintained, China's imports of leather products will be greatly reduced if it is reduced.

In addition, the oil and its products and tobacco exported to the United States account for only 6% and 5% of the total exports, but in the past three years, the proportion has increased by 50% and 6 times a year respectively.

Such a large increase in exports to China indicates that the US industry will depend more and more on the Chinese market, so the degree of trade friction may be affected more and more.

If protectionism persists in the US, China can effectively counteract the import of leather, oil and its products and tobacco from the United States.

However, we believe that the positive mutual assistance, openness and cooperation of all countries and adopting a positive attitude to promote trade between them is the more important means to effectively curb the protectionism of the United States.

Under such circumstances, no matter what protectionist policies the United States adopts, its share in world trade will rapidly decline, lose the international market and be isolated politically and economically.

For example, the Chinese government sent a business purchasing group to Europe in 2009 to promote trade between China and Europe, while Europe also indicated that it might relax its high-tech exports to China. China's business procurement and investment mission to South America was deeply supported by the local government and business circles. China and ASEAN signed a free trade agreement, which is a major step to promote trade in Asia.

Admittedly, the most effective way to deal with trade protectionism is to contain itself. This is true for the whole world, especially for China.

We believe that the best way to solve the trade imbalance between China and the United States and promote the development and virtuous circle of various economies is to open up the export of high-tech products to China and relax the investment restrictions of Chinese enterprises on the US.

In the trade friction, China can also turn the domestic structural adjustment into a passive one.

In fact, whether the global economy can recover from this crisis depends on whether the new demand can be formed.

Relatively speaking, the emerging market economy, including China, has relatively healthy financial capacity, and the consumption potential that developed countries do not have.

If China can grasp the opportunity of economic recovery and stabilize external demand, it will gradually pform the mode of economic growth from relying on external demand to relying on domestic demand, which can not only maintain the kinetic energy of China's economic recovery, but also grasp the initiative in the process of trade friction and RMB appreciation.

For China, the biggest bargaining power is that China no longer needs to take other countries' development as a prerequisite for its own economic development.