Treading carefully [By Jiao Haiyang/China.org.cn]

The week of Nov. 5 will be a remarkable one. The world's two largest economies, the United States and China, will embrace their new leaderships. The world is watching closely to see who will be leading the US — the world's most powerful nation, as well as who will be leading China — the world's most populated nation and rising world power. No matter who wins the US election, shaping US-China "commercial diplomacy" is expected to be at the top of both nations' policy agendas.

Since the onset of the 2008 financial crisis, the ensuing recession and increasing trade deficit with China have caused deep concerns for the Obama administration. A key US policy toward China has been to protect American jobs by fighting "Made in China" — in addition to pressuring China to appreciate the yuan and blocking Chinese investment from making US acquisitions. Bilateral trade frictions range from auto tires to solar panels. Meanwhile, companies restricted from investing in the US included CNOOC and Huawei.

Most of these cases against China have resulted in a growing US public misunderstanding of US-China trade relations. As history has shown, trade restrictions and investment limitations between the US and China, if not well judged, only generate tit-for-tat reactions and mutual distrust.

The truth is the interdependence between the US and China will only continue to grow. Few scholars believe that harassing China will benefit the US economy. Needless to say, constructive and cooperative commercial diplomacy between the US and China is not only enormously beneficial to the US and China, but to the world as a whole.

China is a fairly open market now. It has only been a member of the WTO for the past 10 years, but this membership has changed China's trade status immeasurably. If we review China's 15-year journey of getting into the WTO, one of the most valuable lessons for both sides is that constructive talks have benefited both sides. Yes, China needs some external forces to facilitate domestic policy reforms, but the US needs more patience to continue strategic dialogues. Keep in mind, China is still a developing country. China is not rich, since rich is not judged by foreign reserves but by per-capita GDP. In many aspects, such as political and economic power, the two nations are not comparable at present and won't be in the near future. China's ability and willingness to impact the world economic and political order is limited. Not to mention China faces the challenge of tackling domestic social issues for its 1.3 billion people.

Related

• Distrust harms both nations

Go to Forum >>0 Comment(s)