By Zhong Sheng
Social division of labor will become more specialized as a result of growing productivity, and the international division of labor and global market are the preconditions for economic globalization. Without the international division of labor, productivity and social wealth will not increase.
The global industrial chain and supply chain based on the international division of labor constitute the most important results of economic globalization and the bases for the continuous economic development of all countries around the world.
However, some U.S. politicians have tried to turn the clock back, repeatedly claiming that their country “suffered loss” to gain extra advantage by unfair means. Selfish, shallow, and short-sighted, they even alleged that China has swallowed the U.S. in an unprecedented way for decades, which causes trouble to the international division of labor and damage to both itself and others.
The basic fact that China-U.S. economic and trade cooperation is good for China, for the U.S. and the whole world cannot be denied by some U.S. politicians. As a matter of fact, both countries’ common interests far outweigh their differences and have long become an important force promoting them closer to each other.
It was recognized by American politicians who handled international relations with a strategic and long-term perspective many years ago.
During U.S. President Richard Nixon’s visit to China in February 1972, he said “What brings us together is that we have common interests which transcend those differences.”
The handshake between Chinese and American officials back then and cooperation across the Pacific have created many common interests for China and the U.S. However, some short-sighted U.S. politicians cannot figure it out and are unwilling to accept that.
A normal economic and trade relationship is a mutually beneficial one based on fair trade, not a zero-sum game. The theory of comparative advantage in international economics shows that one country’s trade gain doesn’t mean loss for another country and all participating parties can benefit from the trade.
China-U.S. economic and trade cooperation has promoted the economic growth of the U.S., reduced its inflation, created numerous jobs for the country, brought tangible benefits to American consumers and numerous business opportunities and profits to U.S. companies, and helped upgrade the country’s industry.
Some U.S. politicians are either simply innocent or playing dumb when they only talk about their country’s trade deficit without mentioning the economic growth, increase in job opportunities, lower consumption costs and higher corporate profits brought about by China-U.S. economic and trade cooperation.
Taking advantage of the two ends of the “smiling curve” of the global value chain, the U.S. manufactures products in China and exports them to the rest of the world, gaining most of the added value in bilateral trade with China.
According to researchers from the Federal Reserve Bank of San Francisco, for every dollar the American people spent on an item labeled “Made in China” in 2018, about 56 cents actually went to U.S. companies and workers, the highest among all sources of imports.
In fact, the capital accumulated from China’s trade surplus will flow back to the U.S. in the form of investment and purchases, supporting the U.S. consumer market and financial market.
This also reflects a basic principle of international economics: international trade is conducive to promoting the optimal allocation of resources worldwide and the common economic development of all countries.
Historical experience shows that the common benefits brought by China-U.S. economic and trade cooperation have gone far beyond the bilateral scope.
When the global economic crisis took place in 2008 and the world economy fell into recession, Henry Paulson, who then served as U.S. Treasury Secretary, said that the U.S. leader should make China a growth opportunity for U.S. companies, consumers, exporters and investors.
Facts proved that China had taken active and effective actions to work together with global partners and become a major engine for global economic recovery. In 2009, China contributed more than 50 percent to the world’s economic growth.
Despite the enormous impact of the COVID-19 pandemic on the global economy, the International Monetary Fund predicted that China is the only major economy expected to achieve positive growth in 2020.
Deepening China-U.S. economic and trade cooperation will help get the two countries’ economies back on their feet after the pandemic and is still a wise move that meets the expectations of the people of both countries and the rest of the world.
Recently, the U.S. Chamber of Commerce and over 40 trade associations called for expansion of China-U.S. trade, saying it will promote the recovery of the global industrial chain, boost the global economy amid the pandemic, and have positive effects on production resumption in all countries.
It’s alarming that some U.S. politicians deliberately distorted win-win cooperation while advocating “the U.S. loses” theory, even at the cost of the common interests between China and the U.S., causing loss to both countries and the whole world.
Recently, the Americans For Free Trade coalition and about 160 American companies and trade associations sent a letter to the U.S. Congress, saying that the U.S.-China trade war made Americans pay an additional $50 billion in tariffs in 2019, and erased $1.7 trillion in American listed firms’ market value. It is worthy of reflection: can suppressing cooperation and stoking confrontation be a long-term option?
Joseph S. Nye, a professor at Harvard University, recently explained the concept of “positive-sum game,” saying that it is not enough to think of U.S. power over others, and the country must also consider power with others to accomplish joint goals.
Developing China-U.S. relations must avoid strategic miscalculations and irreversible mistakes leading to catastrophes due to myopia. Only by jumping out of the zero-sum mentality, pursuing win-win cooperation, and enhancing capacity for win-win results with other countries, can the two countries conform to the trend of economic globalization.
(Zhong Sheng is a pen name often used by People’s Daily to express its views on foreign policy.)