The US has promoted "decoupling" and "de-risking", which has had a considerable impact on China-US economic and trade relations. In 2024, most industries in the United States will soon enter the inventory replenishment cycle, and China's strategy of expanding domestic demand and high-level opening-up will be further promoted, which will further release the potential of China's super-large market, which is conducive to the improvement of the economic and trade situation between China and the United States.
Economic and trade cooperation has always been regarded as the "ballast stone" of China-US relations, and in the context of the increasingly complex internal and external environment of China-US relations, can this "ballast" continue to play a key role in China-US relations?
In recent years, the United States has been treating China as a strategic competitor to contain and suppress China, which is not conducive to the promotion of constructive economic and trade relations between China and the United States. Since 2018, Trump** has imposed high tariffs on China, expanding the target of the tax from high-tech manufacturing industries such as machinery, electronics, medicine, and automobiles to raw materials such as chemicals and metals, as well as end consumer goods such as clothing and food. In the past three years in office, Biden has basically maintained the high tariffs imposed on about $300 billion of Chinese goods during the Trump period, and at the same time, as the Sino-US technology war intensifies, Biden has promoted "decoupling" and "de-risking" through non-tariff barriers such as import bans, export controls, and industrial subsidies.
These practices have had a considerable impact on Sino-US economic and trade relations, which are mainly manifested in the following aspects:
The scale of China and the United States has dropped sharply. In 2023, the bilateral ** amount between China and the United States will be 6,644$5.1 billion, down 116%。Among them, China's exports to the United States are 5002$9.1 billion, down 131%；Imported from the United States 1641$6 billion, down 68%, with a surplus of $336.1 billion with the United States, a decrease of 168%, and the U.S. deficit with China fell to its lowest level in more than 10 years.
Declining interdependence between China and the United States. From 2018 to 2022, the proportion of U.S. imports from China was as follows: 5%, which will further drop to around 14% in 2023, a decrease of 7 percentage points in 2023 compared to 2018, before the launch of the ** war against China. Specifically, the decline in capital goods and their parts (except delivery equipment) and industrial supplies directly related to production was even greater.
In the first six months of 2023, China accounted for 13 percent of U.S. merchandise imports in the first six months of the year, according to WSJ3%, down from 21 in all of 2017The peak of 6% is 12 percent since 2003 (two years after China joined the World Organization).The lowest level since the 1% percentage.
China and the United States have shifted their respective external powers. In recent years, U.S. exports of semiconductors, liquefied natural gas and coal to China have declined significantly, and the "reshoring" of U.S. manufacturing and the "nearshoring" and "friendliness" of the ** chain have caused some product imports to be diverted to regions outside China. At the same time, China has shifted some of its foreign purchases from the United States to other regions. Since 2023, China's exports of intermediate goods and capital goods to ASEAN, Mexico and other economies have grown rapidly, and the industrial chain relationship between China and ASEAN and other emerging economies has become closer. These circumstances show that China and the United States have shifted their respective foreign powers, and also show that although tariffs have changed the bilateral amount between China and the United States, they have not significantly changed the status of the two countries in the world pattern.
2024 marks the 45th anniversary of the establishment of diplomatic relations between China and the United States, and the two countries** have increased more than 200 times in 45 years, with a two-way investment stock of more than $260 billion. The economic and economic relations between China and the United States are deeply integrated, and the foundation of economic and trade relations is still solid, even if the United States intends to reduce its dependence on China, the ties between the two countries cannot be severed. China is still a very important import place for the United States in the field of consumption and industrial production, and the United States is still one of the important imports of China's high-end intermediate goods, and China and the United States are still one of each other's most important partners.
It is expected that in 2024, most industries in the United States will soon enter the inventory replenishment cycle, and the import demand for consumer electronics, furniture and building materials, food and agricultural products, textiles and apparel and other goods may expand. At the same time, China's strategy of expanding domestic demand and deepening high-level opening-up will further unleash the potential of China's super-large market, which is conducive to the improvement of the economic and trade situation between China and the United States.
Recently, under the active promotion of the San Francisco meeting between Chinese and US leaders, communication and interaction between China and the United States in various fields and at all levels have become more frequent, and the third meeting of the China-US Economic Working Group was held not long ago, all of which have played a positive role in promoting the warming of Sino-US economic and trade relations. At present, China-US relations are at a new historical juncture, and cooperation is the trend of the times, but we must also admit that there are contradictions and differences between China and the United States, and the key lies in how to do it. Both sides need to listen to each other and work together to find solutions to their differences. China and the United States need to reach consensus on major issues of principle, and even more so, they need to translate the consensus into concrete actions.
Trump, the former leader of the Republican primary election in the United States, mentioned in an interview with Fox News in February that if he is elected, he will impose tariffs of 60% or more on Chinese goods.
First of all, the top priority is to remove the tariffs imposed on China. Trump, the former one, recently announced that if he is re-elected, he will impose tariffs of 60% or more on Chinese imports. If this is the case, it will undoubtedly be a disaster for Sino-US economic and trade relations. It is hoped that the United States will listen to the voices of all walks of life in China and the United States, respect the WTO expert group's ruling, and cancel the additional tariffs on China as soon as possible.
Second, we need to go beyond the framework of great power competition and build a new China-US competition and cooperation relationship. History has repeatedly proven that the interdependence and reciprocity of China-US relations are endogenous, and the success of China and the United States is an opportunity for each other. The in-depth implementation of China's innovation-driven development strategy and industrial upgrading have led to the growth of global exports of high-tech products, including those of the United States. Over the past decade, China's imports of high-tech intermediates have grown at an average annual rate of more than 15 percent, and the Chinese market has become a fertile ground for U.S. multinationals to drive global innovation. China and the United States have their own strengths in emerging fields such as semiconductors, artificial intelligence, and new energy vehicles, and strengthening scientific and technological cooperation is in line with public opinion and trends. U.S. export controls and investment restrictions in areas such as chips, semiconductors, and artificial intelligence, as well as physical sanctions, will not help it improve its industrial competitiveness, but will lead to a lose-lose situation.
Finally, we should shoulder the responsibilities of major countries and work together to address global challenges. The future of the world requires U.S.-China cooperation. China and the United States should lead in emerging technological challenges such as sustainable development and the environment, energy innovation, reform of the multilateral system, and addressing emerging technological challenges such as artificial intelligence. At the same time, China and the United States should also cooperate in global economic governance and governance, strengthen policy coordination, and jointly shape global rules.
Author: Zhang Monan, Deputy Director of the U.S. and European Research Department, China Center for International Economic Exchanges **China-U.S. Focus WeChat***