How should China respond to US policy package?

Editor's note: Dong Shaopeng is a senior research fellow at the Chongyang Institute for Financial Studies, a think tank at the Renmin University of China. The article reflects the author's opinions and not necessarily the views of CGTN. It has been translated from Chinese and edited for brevity and clarity.

Recently, US President Donald Trump signed the so-called "America First Investment Policy" memo, which encompasses a broad range of policies aimed at deterring, suppressing and encircling China. 

This is not the "small yards and high fences" approach we often refer to in recent years but a systemic and comprehensive measure. 

The "America First Investment Policy" memo is steeped in hostility toward China, including: preventing China from making direct or indirect investments to acquire cutting-edge technologies, intellectual property, or leverage in strategic industries; blocking Chinese investments in core US assets such as technology, food supplies, farmland, minerals and ports; and keeping China away from raising capital in the US through securities issuance, US index investments and funds to develop military, intelligence and other security apparatuses.

As we know, in recent years, major Chinese A-shares have been included in indices such as the MSCI and the Dow Jones. 

Now, the US authorities are set to reassess these financial collaborations. 

This US memo explicitly bans Chinese investments in critical US technology, critical infrastructure, personal data and other sensitive areas. 

Meanwhile, stricter scrutiny will be imposed on countries cooperating with China to limit China's access to US capital, technology and expertise for the benefit of the US.

The memo further proposes suspending or terminating reciprocal agreements between China and the US, including tax-related ones.

The Trump administration's hasty rollout of this policy suite is not just another "small yards and high fences" measure but a comprehensive package to deter, suppress and encircle China. 

We must counter the US encirclement and all-out containment with more pragmatic and proactive measures.

Firstly, we must firmly safeguard our security bottom line in the fields of technology, finance, economic circulation and foreign trade. 

At the same time, we need to strengthen our strategic autonomy, protect intellectual property, drive breakthroughs in high-tech innovation and enhance capital accumulation and utilization.

Secondly, we must further advance high-level opening-up. 

We should deepen our partnerships with all countries, enterprises and other entities that are willing to cooperate with us amicably and improve the cooperation level. 

Markets should be opened further, and it is crucial to formulate plans and promote development based on new industrial and supply chain structures. 

In the long run, efforts to artificially block capital, technology and commercial cooperation will fail. 

The momentum of economic globalization is unstoppable.

Thirdly, it is vital to better communicate the logic and stakes behind the US policy package with political, business and financial communities in the US in order to seek support. Simultaneously, we must strengthen countermeasures and penalties against the US's erroneous actions.

For certain policies, we can set them aside and let them naturally ferment and backfire until the US feels the consequences and realizes the flaws in those policies.

We must remain resolute in our position, proactively tackle challenges and suppression, safeguard our rights and interests, and give play to our advantages and build China's strength. 

Once we navigate through this storm, it is nothing but clear skies ahead.