The 2019 China International Fair for Trade in Services intends to sign $105 billion. (Photo by Chun Guang from People’s Daily Online)
By Shen Weiduo and Chen Qingqing
China has enough countermeasures but hopes not to have to use them in the trade war with the US, a former senior Chinese official told the Global Times on Friday, May 31.
The comment was made on the sidelines of a high-end seminar in Beijing on Friday where former Chinese officials and industry representatives discussed and analyzed the latest developments in China-US relations.
China has many possible countermeasures including rare earths, Boeing, US software, cars and infrastructure, former vice commerce minister Wei Jianguo told the Global Times on Friday.
“But we don’t want to turn trade wars into financial wars, science and technology wars, tourism wars or even ideological wars and South China Sea wars,” Wei said.
“I personally think that the US has made a strategic mistake, the biggest strategic mistake it has made since the founding of the US.”
The US “initiated a wrong trade war at the wrong time and chosen a wrong target,” Wei said, even as China maintains sincerity toward negotiations.
“The US has changed its policy from restricting China’s development to comprehensively containing China, to beat China down, and the trade war might last 30 to 50 years,” Wei added.
A former governor of the country’s central bank said it was “all up to the attitude of the US” whether China needed more countermeasures.
“What I can say is we’re determined, well-prepared and calm after the US side decided to escalate the trade war,” Dai Xianglong, former governor of the People’s Bank of China, told the Global Times.
Chinese officials still harbor hopes that leaders of the world’s two largest economies might meet at the G20 summit in Japan despite the escalating US crackdown on Chinese tech companies.
“However, considering the hegemonic and bullying behavior of the US, I foresee growing obstacles,” Dai said.
The US clampdown hurts its own companies, Dai noted, and China and the US must eventually end up cooperating.
US agriculture firms and farmers already feel the heat. Agricultural products from the US to China have declined by over 32 percent since 2018 to the level of 10 years ago, even as China’s agricultural imports reached a record high of $136.7 billion in 2018. The trend continued in the first quarter of 2019, with that number further dropping by 68.7 percent, and imports of soybeans, cotton and corn slid by more than 50 percent, Cao Derong, president of CFNA, China’s largest agricultural international trade organization, said at a seminar on May 31.
The US auto sector will also be hurt, Dong Yang, former vice chairman of the China Association of Automobile Manufacturers, said, adding that “If the trade war between China and US continues to escalate, the vacancy left by US car firms will soon be taken by Europe and Japan. Indeed, Japanese car sales have already seen a momentum in China.”
The China-US trade war will not only hit China and the US, but its impact would also spread to other regions and the rest of world, Dai warned.
If the China-US trade war continues expanding, that may lead to a global economic recession or a global financial crisis even worse than the 2008 US financial crisis, he said.
Many international organizations and authorities have lowered the expected growth rate of the global economy and trade. The UN’s recently released report estimates that the global economic growth rate will be 2.7 percent in 2019, which is 0.3 percentage points lower than the forecast in January this year.
Officials at the Friday seminar in Beijing also stressed that China has the ability to withstand possible financial turbulence, with a strong and stable economic base and multiple policy tools, amid a long-standing trade war between the world’s two largest economies.
In 2018, China and the US accounted for 40 percent of the world’s total economy, and total bilateral trade accounted for 23 percent of global trade.
“We urge the US to return to reason on its China policy. Economic bullying is unpopular, and suppressing China’s development will just be in vain,” Zeng Peiyan, chairman of the China Center for International Economic Exchanges (CCIEE), said at the seminar.