Zero-sum rejection

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Robust Sino-US trade despite political obstruction of Washington shows US society does not seek economic decoupling

Although the Joe Biden administration has repeatedly stated that the United States does not seek a new Cold War with China; does not aim to change China's system; the revitalization of its alliances is not targeted at China; the US does not support "Taiwan independence"; and it has no intention to seek a conflict with China, Washington is still advocating decoupling between the two economies, and advancing cooperation with NATO and Asia-Pacific countries for the purpose of containing China. In addition, the visit to Taiwan by former US House speaker Nancy Pelosi further heightened tensions between the two countries and strained the situation across the Taiwan Straits.

But despite this, the trade volume between China and the US reached a record high level of $690.6 billion in 2022. The fact that China-US trade has grown in volume despite the above-mentioned unfavorable factors shows that China-US relations are not a zero-sum game, and there is still room for win-win cooperation.

China and the US have developed a profound economic interdependence. China, as well as being an exporter of daily consumer goods, is also a supplier of components for some industrial sectors in the US. US companies also benefit from the vast Chinese market. Although the US has tried to sabotage economic cooperation with China and sought to reduce its economic dependence on China since the Donald Trump administration, the bilateral trade volume has repeatedly hit new highs in recent years. It reached $633.52 billion in 2018 even as the Trump administration launched a trade war against China.

The increase in trade volume does not mean that the US government has given up its decoupling attempt. In 2022, the US continued to promote international trade in favor of its so-called reliable trading partners, and its trade volume with 90 countries reached historical highs. For example, the trade volume between the US and Vietnam, widely seen as a "substitute" for China, has tripled over the past decade. The trade volume between the US and the European Union also exceeded that between the US and China. In a bid to accelerate the reshaping of supply chains and diversification of suppliers the Biden administration is trying to make companies reduce their dependence on China by means of incentives and punishments. However, with countries being highly interconnected, the US should not aspire to the establishment of a new economic order that pursues decoupling with China while delivering economic prosperity to the nation.

First, economic exchanges between China and the US are the natural choice of US companies and its people. David Dollar, a senior fellow in foreign policy at the Brookings Institution, recently stated that trade between the US and China is "based on economic efficiency" and a "draconian decoupling" will have a big negative effect on US living standards. The 2022 American Business in China White Paper released by AmCham China stated that 83 percent of its member companies report that they were not considering relocating manufacturing or sourcing outside of China. About 200 US companies took part in the 2022 China International Import Expo in November. Facing pressure from the US government to "decouple" from China, some US companies have adopted a business strategy known as "China Plus One", which shows that economic cooperation between the two nations is still a major trend determined by market rules.

Second, it is difficult for the US to establish a new economic system that excludes China. China is not a "factory" for low value-added products or an assembly plant, but an industrial economy with relatively complete industrial chains, sound infrastructure and modern management and innovation mechanisms. Its position in the global industrial chain is unique and hard to replace. China has developed extensive trading relations and cooperation with countries around the world. Although some anti-China politicians have advocated boycotting Chinese products, the manufacturing and processing of products these countries import from nations outsides China often involve the participation of Chinese companies. From the perspective of a third country, economic and trade exchanges with China are in their own interests. Most countries in the world do not want a few politicians to provoke ideological confrontations forcing them to pick sides in the economic field.

Third, from a fundamental point of view, trade between China and the US grew because the two economies are relatively stable and offer sufficient production capacity and consumer demand. For example, China's GDP grew by 3 percent year-on-year in 2022 to about $18 trillion, despite the challenges from the lingering pandemic and extreme climate events. Although a few countries are attempting to interfere with the development of other countries through their beggar-thy-neighbor economic policies and reap benefits by stirring up tensions in various regions, such attempts will eventually backfire under the highly interconnected global economic system.

Some Western politicians claim that their sanctions and suppression against Chinese companies are part of efforts to "force the Chinese government to open up". Such remarks are groundless, and show there is a Cold War mentality behind them. Contrary to claims by some overseas interest groups in recent years about "China's backslide in market orientation", China has remained committed to opening-up and cooperation with countries around the world, including the US, despite the anti-globalization wave and trade protectionism. China has released a new catalog of industries to encourage foreign investment this year, and it is set to adopt a series of policies to attract foreign investment. Although some Western politicians have brought a Cold War-style zero-sum mentality into China-US economic relations, the two major economies are closely linked, and both sides will benefit from cooperation and lose from division. The strong performance of bilateral trade in 2021 and 2022 showed that despite the intention of a few politicians to portray the international situation as life-and-death competition, the US society wants to cooperate with China. Washington should not see cooperation as a pretext for competition and confrontation. Instead, it should take economic cooperation as the foundation to effectively expand and deepen the scope of cooperation, and formulate a responsible China policy that accommodates the willingness from the US society to cooperate with China.

The author is an assistant research fellow of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, and the National Institute for Global Strategy at the CASS. The author contributed this article to China Watch, a think tank powered by China Daily. The views don't necessarily represent those of China Daily.

Contact the editor at editor@chinawatch.cn.