The US government has not only launched a trade war against China, but is also escalating sharply in depth and breadth, and there is a trend beyond the scope of trade disputes. This has brought more and more uncertainties to the world's prospects and has become a major threat to global interests and human well-being.
The economic relations thinking and trade bullying practices of the US government towards China have at least caused or are causing five major worldwide harms, affecting the international community's perception and understanding of global governance and development trends.
Deal a heavy blow to the growth of the world economy
Trade growth is a key force driving global economic growth. However, the trade war and technological blockade launched by the largest economy against the second largest economy have put the world economy, which was already in a difficult recovery, at risk of falling back into recession.
According to the latest prediction of the United Nations, the growth rate of the world economy will slow down to 2.7% in 2019, which is 0.3 percentage points lower than the forecast at the beginning of the year. The Organization for Economic Cooperation and Development (OECD) has also lowered its forecast for global economic growth in 2019 by 0.3 percentage points.
The World Trade Organization (WTO) had previously lowered its forecast for global trade growth in 2019 from 3.7% to 2.6%. The global trade sentiment index in the second quarter of this year has been at its lowest level since March 2010.
Us investment bank Morgan Stanley has warned that if the US imposes a 25% tariff on 200 billion US dollars worth of Chinese goods for three to four months, the global economic growth rate could slow down by about 50 basis points to 2.7%.
Countries around the world give full play to their comparative advantages and cooperate with each other, forming an efficient global industrial chain, supply chain and value chain. The United States actually raises taxes on all enterprises in the chain, which will force entrepreneurs to reduce investment and thus weaken the momentum of economic growth.
According to the analysis of the Japanese research institution Daiwa Research Institute, Japanese enterprises will directly lose about 500 million US dollars due to the economic and trade friction between China and the United States. French Finance Minister Bruno Le Maire said that the economic and trade friction between China and the United States would directly lead to a reduction in the flow of goods and harm job opportunities in Europe and France.
Due to the deterioration of the world economic environment, some countries will have to relax their monetary policies to stimulate their own economic growth. This will fuel the accumulation of global debt, increase medium-term financial risks and hinder the long-term healthy development of the world economy.
Seriously disrupt the international economic order
The United States is the main founder of the current international economic order and the multilateral trading system. However, nowadays it has become a major factor that undermines the international economic order, harms the multilateral trading system and disrupts the world economic governance system.
Since World War II, an international order based on rules, a multilateral system with the United Nations at its core, and a multilateral trading system with the World Trade Organization at its core have gradually been established on a global scale. On the premise of abiding by the basic framework of the international political and economic order, all countries have opened up and cooperated, achieving common development.
However, the United States' launch of the trade war against China has incited the global spread of economic populism and anti-globalization, posing a subversive threat to the international economic order. Once the foundation of the international economic order is completely undermined, it will cause global economic activities to fall into turmoil and chaos, and harm the long-term development interests of all countries in the world.
Bypassing the WTO dispute settlement mechanism, provoking economic and trade frictions based on domestic laws, and imposing large-scale tariffs on Chinese goods without WTO authorization in violation of regulations - this shows the United States' disregard for the multilateral trading system and its rash act of placing its own selfish interests above international rules, putting the international economic order in an unprecedented danger.
It should be particularly pointed out that the United States, which prides itself on a "fully market economy", openly abuses its state power and takes advantage of its technological superiority to impose a technology embargo on Chinese technology companies such as Huawei under the guise of so-called "national security". This is even more of a wanton trampling on the principles of the market economy and the order of commercial civilization.
The actions of the United States have already made some technology enterprises in other countries feel the fear of the cold wave hitting them, causing incalculable direct and indirect damage to the development of the world's technology industry.
Create new imbalances in the global economy
The direct excuse for the United States to launch a trade war against China is "trade imbalance". In fact, the root cause of the US trade deficit with China lies in structural problems such as excessive consumption and insufficient savings.
If the United States does not focus on solving its own problems but instead imposes high tariffs on goods from other countries such as China, the result will only be counterproductive.
What is more serious is that the United States itself is one of the main causes of global economic imbalance. Its current practices not only do not contribute to the current rebalancing of the global economy, but will instead create new structural imbalances in the global economy.
American misdeeds are put many businesses in dilemma embarrassment, many foreign businesses in China, in particular, if continue to stay in China, could face a trade war caused by rising costs, and choose to leave may lose the Chinese market for a long time, and some potential transfer countries although Labour costs are lower, such as infrastructure, business environment and the industrial chain of completeness than China.
According to a questionnaire survey by the European Union Chamber of Commerce, about one-third of the interviewed entrepreneurs believe that the economic and trade friction between China and the United States is their greatest concern. The uncertainty of the economic and trade relations between China and the United States has increased the difficulty for enterprises to make business decisions, which has brought a serious negative impact on business growth.
One major root cause of the structural imbalance in the global economy is that the global industrial division of labor is not yet reasonable enough.
Some developing economies at the downstream of the value chain are engaged in manufacturing and processing and other links due to low entry barriers, resulting in excessive competition and overcapacity.
Some developed economies at the high end of the value chain, by taking advantage of their technological monopoly and global pricing power, have reaped excessive benefits and hindered the process of transformation and upgrading of developing economies.
The direct and derivative impacts of the US trade war against China and some technological embargoes are causing new distortions and generating new structural imbalances in the world economy.
"Destructive government Variables"
According to the common sense of political economy, a government of a country should be the main body dealing with unstable factors, rather than becoming an unstable factor. Abiding by rules and attaching importance to commitments enable different individuals, groups and countries to form extensive cooperation, and are also the main characteristics of humanity's entry into a civilized society.
Given its share in the world economy and its say in the international political and economic governance system, the United States should have made positive contributions to the prosperity and stability of the world. However, the United States has disregarded the internationally recognized and generally followed norms of communication among countries and has taken a series of acts of bad faith, making itself a serious "destructive variable".
The capricious and profit-driven nature of the US government was fully exposed in the Sino-US trade negotiations. The various uncertainties it created and disseminated seriously disrupted the expectations and behaviors of global market entities.
Previously, from withdrawing from international organizations such as UNESCO and the UN Human Rights Council to withdrawing from international treaties such as the Paris Climate Agreement, the Joint Comprehensive Plan of Action on the Iranian Nuclear Issue, and the Intermediate-Range Nuclear Forces Treaty, a series of destructive actions caused by "America First" have seriously impacted the trend of world peace and development.
Obviously, the United States is becoming a "black swan" that the international community is highly vigilant about and a "gray rhinoceros" that is strictly guarded against.
Wantonly infringe upon the economic sovereignty of other countries
At the negotiating table, the US government made a number of unreasonable demands on China, including restricting the operation and development of state-owned enterprises. Obviously, this goes beyond the realm and scope of trade negotiations and touches upon China's basic economic system.
This indicates that behind the United States' launch of the trade war against China lies an attempt to infringe upon China's economic sovereignty and force China to undermine its own core interests.
In the Charter of Economic Rights and Obligations adopted by the United Nations in 1974, it was clearly stated that "Each State has full and permanent sovereignty over all its wealth, natural resources and economic activities, including ownership, use and disposal, and is free to exercise such sovereignty."
For instance, after World War II, the international trade system led by the United States encouraged developed economies to transfer technologies to developing economies to create a "technology spillover" effect, in order to adapt to their own economic and social changes, take advantage of the low-cost production benefits of developing countries, and form a strong complement with their own abundant capital and advanced technological advantages.
The Chinese government encourages foreign investment to carry out technological cooperation based on the principle of voluntariness and business rules during the process. The conditions of technological cooperation are determined through equal consultation by all investing parties in accordance with the principle of fairness.
From this, it can be seen that regarding technology transfer, the Chinese government does not have mandatory systems or systematic behaviors, but rather reasonable and standardized practices that are in line with the market economy.
However, the United States has labeled China as "forced technology transfer", compelling China to change its relevant development path.
Other countries have also suffered greatly from it. The US government frequently employs "long-arm jurisdiction", frequently demanding that entities or individuals from other countries must comply with their domestic laws; otherwise, they will be subject to penalties such as being placed on the "Entity List".
Statistics show that as of August last year alone, the number of entities listed on the "Entity List" of the US Department of Commerce worldwide reached 1,013.
This is actually part of the evidence that the United States has violated the economic sovereignty of other countries.
(Source: Xinhua News Agency, Beijing, May 25th)
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