Opinions
2019.09.08 09:45 GMT+8

Why China should not make concessions to the U.S.

Updated 2019.09.09 12:35 GMT+8
CGTN

Editor's Note: Ken Moak taught economic theory, public policy and globalization at the university level for 33 years. He co-authored a book titled "China's Economic Rise and Its Global Impact" in 2015. The article reflects the author's opinions, and not necessarily the views of CGTN.

After threatening China with economic "Armageddon" if he gets reelected in 2020 if it does not make a deal with him now, U.S. President Donald Trump ordered his chief negotiators, Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, to call Chinese Vice Premier Liu He to reconvene negotiations in early October. 

Why is Trump restarting trade talks and how the 13th round of talks will pan out are anyone's guess, but China should not make concessions to the U.S. in the negotiations. Doing so could set a dangerous precedent, emboldening more bullying from Trump and future presidents.

In this sense, standing firm against U.S. bullying is not just a show of strength, but China fighting for the right to walk independent economic development, ideological and foreign policy paths. Besides, the U.S. would not abandon its neoliberal ideology, why should China give up "socialism with Chinese characteristics," which is largely responsible for making the country what it is today.

Trump's trade war was not about "unfair" practices. Rather, it was about a power struggle over ideology and global influence. In the eyes of many in the U.S. political, security, academic and business establishments, China's remarkable economic success poses an "imminent threat" to the United States. Emerging from an impoverished and backward country to become the world's second largest economy in nominal exchange rate measurement and largest in purchasing power parity terms in a generation has put China in a position to compete with the U.S. economically, technologically and geopolitically.

United States Trade Representative Robert Lighthizer (C) gestures as he chats with Chinese Vice Premier Liu He (R) as U.S. Treasury Secretary Steve Mnuchin (L) looks on, Shanghai, China, July 31, 2019. /VCG Photo

However, China's rise is viewed with awe, a combination of respect and wariness. Since the end of the Second World War, no country has become a "near power" to the U.S., enabling it to walk an independent path or not "toe the U.S. line." The achievements gained the country respect, but they also raised concern, explaining why the U.S. government, pundits and media are ratcheting up their anti-China rhetoric.

In the most recent Foreign Affairs edition, for example, the Yale University scholar, Odd Arne Westad, praised China for its remarkable achievements, but he also wrote that its rise might create an "unruly world – one in which fear, hatred, and ambition hold everyone hostage to the basest instincts of the human imagination." Westad's conclusion implied that the U.S. must do whatever it takes to "contain" China's rise. He is not alone on the matter.

Against these backdrops, making concessions or caving in to Trump's bullying could culminate in losing sovereignty, stifling quality economic growth, sliding backwards in technology, losing territorial claims in the South and East China Seas, etc. Past experience has shown that the U.S. routinely "moves the goal posts," changing its mind on what had been agreed to. Trump might see making concessions as a weakness, prompting him to demand more.

Besides, not making concessions is about fairness and justice. The country's major sin is its economic success, affording it to accumulate sufficient resources to challenge the U.S. bullying. China has neither the ability nor the desire to challenge or replace the U.S. as the world's "big brother."

What's more, China has the financial resources and markets to weather the trade war. Its increasingly huge affluent domestic market should be able to absorb much of the goods exported to the U.S. Coupled with more and more countries, including traditional U.S. allies, participating in the BRI, demands for Chinese products could mushroom.

Chinese Vice Premier Liu He meets with a delegation led by U.S. Senator Steve Daines and Senator David Perdue in Beijing, China, September 3, 2019. /Xinhua Photo

It should also be pointed out that the majority of Chinese "imports" are produced by American firms in the Asian country, an arrangement that has served them well as Apple, General Motors and other U.S. firms would attest. Finding an alternative country or returning to the U.S. to produce and distribute the products is easier said than done, it takes time and money.

The costly and complicated process of uprooting and relocating is probably the reason why U.S. toymakers decided to stay in China, presumably because it is difficult to find a country that could produce and distribute the goods as efficiently as China. Moreover, China is and will likely remain the world's economic "beacon" for some time to come. An economy of 14 trillion U.S. dollars could still attract domestic and foreign investments.

Furthermore, Trump's repeatedly boasting of how he "bashed" China's economy with his trade war might be a sign of desperation that he needs an agreement to reverse the economic downward trajectory. His tariffs are literally killing investment, stagnating consumption and wreaking havoc on the agricultural sector, risking his chance of securing a second term. To that end, Trump might compromise on trade terms to reach a deal.

Taking the analysis to its logical conclusion, China should stand firm on its trade negotiation position because that could lead to a fairer and more lasting deal. Making concessions, on the other hand, could lead to the "slippery slope" of U.S. demanding China to abandon its principle and sovereignty.

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