Ambassador Cheng Jingye’s Signed Article on U.S.-China Trade Disputes
15 August 2019
Since I expounded my opinion on China-US trade friction in The Australian two months ago, trade talks between the two countries have been going through a rollercoaster ride.
At the end of June, the Chinese and US Presidents reached the following consensus in Osaka: Restart trade consultations on the basis of equality and mutual respect; no new tariffs on Chinese exports by the US side; negotiation teams ready to discuss specific issues thereafter.
At the end of July, China and the US held the 12th round of high-level economic and trade negotiations in Shanghai. Both sides agreed to undertake intensive talks in August in preparation for the meeting between the heads of negotiation teams in September.
Unexpectedly, soon after the Shanghai negotiations, the US went back on its word and unilaterally announced an additional 10 per cent tariff on US$300 billion worth of Chinese goods.
The glimmer of hope for the world economy brought by the Osaka consensus was again diminished by the flip-flopping of the US. As a result, the global economy fell into turmoil.
The commodity, stock and foreign exchange markets in many countries and regions were hit. Research by an economist from Curtin University concluded that the China-US trade dispute, triggered by the latter, will cost every Australian nearly $300 a year.
Lawrence Summers, a former economic adviser to US presidents Bill Clinton and Barack Obama, warned that the intensifying dispute between the US and China was the biggest economic risk in a decade. At the recent Diggers and Dealers conference, Australian business leaders said that Australia was badly exposed to the risk.
The unilateral imposition of new tariffs on China by the US has not only derailed China-US economic and trade co-operation, but also violated the rules of the World Trade Organisation, undermined the authority of its dispute settlement mechanism, and seriously disrupted the global industrial and supply chain. The price will be paid by the entire international community.
We always believe that negotiations should be based on equality and mutual respect, conducted in a sincere, principled, trustworthy and rules-based manner for mutual benefits and win-win results. The 12 rounds of China-US consultations have not been free of setbacks, each of them being the result of a US breach of consensus and commitments, and backtracking.
If the US intends to force China to make more concessions by imposing extreme pressure, threats or blackmail, it is barking up the wrong tree. On major principles concerning sovereignty, China will not back down even a little bit.
I also wish to shed light on the issue of Chinese procurement of US agricultural produce. The US recently alleged that China has failed to purchase American agricultural produce as promised. In fact, Chinese companies already purchased US soy beans in large amounts and kept asking for new quotations. However, the US announcement of imposing new tariffs on Chinese imports from September 1 is a serious violation of the Osaka consensus. As a result, the Customs Tariff Commission of the State Council of the People’s Republic of China will not rule out levying tariffs on American farm imports purchased after August 3, and Chinese companies suspended their purchase of more US agricultural produce. We hope that the US will keep its promise and implement the Osaka consensus, so as to create necessary conditions for agricultural co-operation between the two countries.
As an ancient Chinese saying goes: If a man does not honour his promise, how can he be trusted? As the only superpower in the world today, the US has repeatedly broken its promises to the international community on global trade, climate change, nuclear non-proliferation and many others.
The unpredictability of the US is not what the world may change, but the commitment and determination of China is what will never change, for opening further to the outside world, maintaining multilateralism and free trade, and promoting a community with shared future for mankind. As for the trade dispute, China’s position will also stand unchanged: China does not want a trade war, but is not afraid of fighting one.