February 16, 2021 15:15 Last update: 15:16
How will U.S. President Bi ascend to position Sino-U.S. relations?
Netease Research Bureau invited Zhang Yansheng, chief researcher of the China Center for International Economic Exchanges, to analyze the US policy toward China.
Zhang Yansheng believes that the policies Biden promoted on stage are actually half-hearted to Trump: buying American products and attacking China. It is generally believed that anti-globalization started during the Trump administration, and that the loss of control of globalization and China’s unfair competition have caused the United States to fail to obtain the expected benefits in globalization. In fact, it is not Trump who made this judgment. It was Obama and Biden during the previous administration of the United States. Therefore, the Biden administration will still be anti-globalization, but unlike the Trump administration, the Trump administration’s approach is passive punitive competition, such as launching tariff wars, technology wars, and rules wars; the Biden administration will do more Adopting active coexistence-type competition, that is, launching more institutional competition, technological competition, and value competition with China, and more about doing a good job in the allied system and assuming international responsibilities.
Zhang Yansheng, chief researcher of China International Economic Exchange Center.
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The full text of Zhang Yansheng is as follows:
1. The Biden administration’s strategy is to promote active coexistence competition
Obama has a famous saying: “The United States will lead the world for another hundred years.” Trump’s slogan after taking office was: “The United States will be great again.” The core issue of the Sino-US dispute is that the United States feels the competition from China. . In 1990, China’s GDP accounted for 6.62% of the US GDP. In 2020, China’s GDP accounted for more than 70% of the US GDP. The IMF and the World Bank have also predicted in the past that China’s GDP has surpassed that of the United States in terms of purchasing power parity. From 2026 to 2028, China’s GDP will exceed that of the United States, and this has also become a consensus among some authoritative international organizations.
Under what circumstances will China and the United States move from strategic competition to strategic cooperation, I personally think there is only one possibility: the United States admits that it cannot hold back China. Like the Battle of Shangganling, the United States could not fight it no matter how indiscriminately it bombed, and finally had to sign a truce with China in Panmunjom. Therefore, as far as China is concerned, a big problem is how, like the Battle of Shangganling, in terms of politics, military, economy, culture, values, etc., the United States has the ability and patience to persist in “I will not move.” Finally, return to the strategic basis of Sino-US cooperation and return to a new type of major-country relationship that is non-conflict, non-confrontation, mutual respect, and win-win cooperation.
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The Sino-US economic relationship is expected to go through three stages from strategic competition to strategic cooperation. How to fight but not break in these three stages requires a comprehensive, systematic and careful response.
The first stage is the struggle for interests. The United States currently needs China, because the United States must implement a large-scale economic rescue plan and an economic recovery plan to get rid of the impact of the new crown epidemic and return to normal economic and social life. Both involve the issue of who can catch such a huge amount of stimulus plan. . The U.S. economy was hit hard by the financial crisis in 2009. On the one hand, the U.S. passed the U.S.-China Economic Security Committee and other congressional reports to dump the responsibility for the crisis on China, and members of Congress also proposed a motion to let China pay the bill; on the other hand, the U.S. Treasury Secretary Paulson came to Beijing urgently with one purpose: to lobby China to buy a large amount of US treasury bonds. This time, Biden proposed to send out US$1.9 trillion (a rescue plan) before he took office, and he may have to send out more money in the future (a recovery plan), and put pressure on the appreciation of the renminbi. But if a country uses its own currency as an international currency to issue money without restriction and let the world follow it to take medicine, then the world will have no way. What the Chinese can do is to learn the lessons of 2009.
At the end of 2008, China’s macro leverage ratio was only 141%, making it one of the healthiest economies in the world. Ten years later, China’s macro leverage ratio rose to 256%, and now it is as high as 280%. At that time, China-US cooperation used the G20 as a global governance platform to cope with the crisis and get rid of difficulties, and finally came out of recession. In 2009, China’s GDP accounted for 8.5% of the world’s GDP, but its contribution to world economic growth was as high as 50%. Sometimes I would imagine that if the renminbi did not appreciate at that time and did not buy a large amount of US Treasury bonds, would the US use hegemony to punish you, such as imposing a 27.5% tariff on all Chinese exports to the US; at that time a large amount of international capital entered China to promote In response to the appreciation of the renminbi, in August 2014, when the United States withdrew from the volume and entered the interest rate hike channel, a large amount of capital outflows, forcing us to implement strict foreign exchange control policies. Therefore, I believe that this time we must learn from the lessons of 2009 and maintain strategic determination.
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The second stage is the dispute over the system. In fact, the system dispute here is more related to economic aspects, that is, the United States accuses China of some structural issues, such as state-owned enterprises, industrial policies, industrial subsidies, intellectual property rights, the environment, labor standards, etc. These issues reflect China and the United States. Contest on the economic system. At present, the comprehensive investment agreement signed between China and the EU, the promotion of China-Japan-Korea FTA construction, and the active consideration of applying to join the CPTPP will promote progress in my country’s economic system reform.
The third stage is the dispute between politics and ideology. The United States wants to promote the Americanization of the world, while China insists on harmony but difference, openness and tolerance. It is a process to move from strategic competition and confrontation to non-conflict and non-confrontation, mutual respect, and win-win cooperation. In this process, we must always remain calm.
How China and the United States can achieve cooperation in these three stages without breaking through a struggle is a severe test for both sides.
In fact, the second stage of the game has now begun. Because after Biden took office, the question people discussed was when to start the second phase of Sino-US economic and trade agreement negotiations, and the topics discussed in the second phase of Sino-US economic and trade agreement negotiations were mainly structural issues, although the first phase of Sino-US economic and trade agreement negotiations The implementation of the economic and trade agreement has been hindered by the epidemic. However, the Biden government may not be entangled in the first phase of the economic and trade agreement, and will move to new negotiations with obvious Biden’s mark and the Democratic Party-led style. From this perspective, I think that if Biden expresses dissatisfaction with the implementation of the first phase of the Sino-US economic and trade agreement, it can only be a means of exerting pressure.
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We can see that in recent years, China has promoted the signing of the RCEP, initiated the China-Japan-Korea FTA negotiations, actively considered joining the CPTPP, including the conclusion of the China-EU Comprehensive Investment Agreement CAI, all of which are maintaining a peaceful international environment and a stable international environment for the new stage of development. Order to create a new situation. From a domestic perspective, China is fully implementing the new development concept and constructing a new development pattern of double loops. This is a major change with long-term strategic deployment.
At present, while giving priority to domestic issues, the United States will also increase its investment in Asia. For example, Campbell, the head of Asian affairs nominated by Biden, is an important official dedicated to promoting the return of the United States to the Asia-Pacific and promoting the TPP strategy. Will the United States return to TPP next? If so, what will they do? I believe the first thing the United States must do is to restart the 22 clauses frozen in 11 countries including Japan, Canada, and Australia after the United States withdraws from the TPP to restore the high standards under the TPP that year.
The second thing that may be done is that new rules with higher standards will be established, with the purpose of re-establishing rules and regulations for the world in the Biden era.
The third thing is that China and the United States have launched a comprehensive game of rules at the regional, plurilateral, and multilateral levels. In fact, the so-called high standards are American standards that can maintain the United States’ global leadership and the system of allies for a long time. But the United States can constantly change the rules. It hopes that in this game of rules, no one can play it. American standards are derived under the American system. The United States often says: You do not meet the American standards, so you have to adjust, otherwise you will be out. From this perspective, its high standards are not really high, but to play with the United States the best and ever-changing game in the United States.
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Although Japanese Prime Minister Yoshihide Suga euphemistically signaled rejection of China’s accession to the CPTPP, the United States is behind Japan’s opposition. The reason is simple. China does not join. Now the economic scale of CPTPP only accounts for 13% of the world’s total. China’s economic aggregate accounts for 17% of the world’s total. China’s economic aggregate accounts for 130% of the CPTPP’s. After China’s accession to CPTPP, its economic aggregate accounts for the world’s total. CPTPP can become the world’s largest free trade zone by 30% of the total, therefore, China’s participation in CPTPP is very attractive to Japan.
Biden’s 337 investigation of “Luxshare Precision” on the first day on stage was just an introduction, and there was a deep meaning behind it. Whether it is the 301 investigation, the 232 investigation, or the 337 investigation, it is essentially provocative. The policies Biden promoted on stage are in fact the same as Trump: buying American products and attacking China. It is generally believed that anti-globalization started during the Trump administration, and that the loss of control of globalization and China’s unfair competition have prevented the United States from gaining the expected benefits in globalization. However, it is not Trump who makes this judgment. It was during Obama and Biden’s administration.
Therefore, the Biden administration will still be anti-globalization, but unlike the Trump administration, the Trump administration’s approach is passive punitive competition, such as launching tariff wars, technology wars, and rules wars; the Biden administration will more Adopting active coexistence-type competition, that is, launching more institutional competition, technological competition, and value competition with China, and more about doing a good job in the allied system and assuming international responsibilities.
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2. Globalization enters the second half and the importance of safety has risen significantly
There are three driving forces in the first half of globalization, namely, opening up, marketization, and innovation. Therefore, one of the important characteristics of the first half of globalization is that the world economy has entered an increasingly open, market-oriented, and more innovative-driven period. This period is often the golden period of world economic growth. Therefore, since the 16th National Congress of the Communist Party of China, China has proposed that “the first two decades of the 21st century are a period of important strategic opportunities for my country that must be seized tightly and can make a lot of progress.”
Another important feature of the first half of globalization is the incubation period for the accumulation of global economic and social conflicts. Because the three driving forces of globalization only promote efficiency improvements and welfare enhancements, they have not solved the global, regional and internal equitable distribution issues; they have not resolved the confrontation and conflicts between the predominant powers and the emerging powers; they have not resolved. Bubbles, virtualization, and hollowing.
Therefore, these long-standing contradictions and problems in the second half of globalization are transformed into three crises: the first is the high frequency of economic crises, financial crises, banking crises, and currency crises; the second is that social and political crises continue to occur in the United States and Europe. break out. Because of the injustice brought about by globalization, the conflicts in the United States, Europe, and Japan have intensified. Only then can the Sanchez democratic capitalism in the United States rise. The third is the Thucydides trap crisis and the crisis of confrontation between great powers. During the period of globalization from 1870 to 1913, the then hegemonic countries of Britain and France went from prosperity to decline, then the emerging powers of the United States and Germany from weak to strong, conflicts and confrontations between the great powers finally triggered two world wars. This time, the world is undergoing major changes unseen in a century. The protagonist is the conflict and confrontation between China and the United States.
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Now that globalization is entering the second half, how can we nurture new opportunities amidst crises and open new games amidst changes? It is a severe test for all countries in the world. I think we can deal with it from the following angles. The first is to have two overall interests in mind. That is to say, grasping the big changes in the world unseen in a century and the overall situation and the general trend of the Chinese rejuvenation strategy, it is easy not to make common sense errors.
The second is to do your own thing. From studying and implementing the spirit of the Central Economic Work Conference and the Fifth Plenary Session, we can see three “news.”
First, China has entered a new stage of development. The scene of the past 40 years is turning over, and the scene of the new 30 years has begun. In the past 40 years, I have mainly told stories about market economy, export-oriented economy, and industrialized economy. In the next 30 years, we must tell stories about science, the rule of law, and people’s livelihood. Everyone will face the question of how to adapt to the new situation, new situation and new requirements.
The second is to implement the new development concept. Innovation, coordination, greenness, openness, and sharing are easier said than done. If innovation is to become the first driving force, how are innovation chains, innovation incentives, innovation ecology, innovation networks, and the world brain constructed? For green to become a universal form, to achieve carbon peaks by 2030 and carbon neutrality by 2060, time does not wait. What should we do?
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The third is the new development pattern. There are three sentences in the new development pattern: The first sentence is to determine the main status of the domestic cycle. How to expand domestic demand, how to increase the proportion of household consumption in GDP, how to promote the construction of a national and urban-rural coordinated social security system, and how to expand the process of urbanization of middle-income groups and the surplus rural population. Among them, the establishment of a new higher-level open economic system requires that tariff rates tend to decline, non-tariff measures are further cancelled, facilitation efficiency and standards continue to increase, and service industry market access is further expanded.
The second sentence is to build a new development pattern of domestic and international double loops. Among them, we must deeply cultivate East Asia, “One Belt One Road”, and deeply cultivate the production network in the United States and Europe.
The third sentence is to cultivate new advantages for participating in international cooperation and competition under the new situation. For example, how can China and the United States avoid falling into the Samuelson trap? The economic structure and trade structure of China and the United States used to be complementary structures, but now and in the future, they will increasingly be competitive structures. The competitive structure will have a high probability of falling into the Samuelson trap: China’s future innovation and industrial upgrading will increasingly affect the core competitiveness of the United States. Therefore, when we enter the large aircraft, 5G, AI and other fields, these industries are the core strengths and technology lifeblood of the United States. To avoid such conflicts, it is necessary to build a higher-level complementary industry, technology, and trade structure, each to obtain a competitive advantage that is difficult to replace, and to achieve a new balance.
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How to do our own thing, we have certain advantages. The first advantage, from the demand side, China not only has a super-large domestic market, but also has super-high-quality application scenarios. Needless to say, the large scale of the Chinese market, one of the factors of high quality stems from the needs of the new generation of children born after 1995 in China is high quality. Therefore, whoever can meet the needs of the new generation of China will occupy the commanding heights of global competition. How to satisfy China’s big market through a demand-side revolution and a supply-side revolution is something we need to think deeply about.
The second advantage is that the spring of Chinese technology has arrived. When young children now choose their majors, they are not as keen on studying finance, management, learning how to get rich, and finding good jobs like those in the past. Many children born after 1995 are increasingly learning science. They study science not to make money, but to love and interest. I think the real spring of Chinese science has begun.
How to do our own thing, we have to learn some lessons. The U.S. economy recovered in 2015. When the first interest rate hike occurred, global capital flowed out of China, flowed to the United States, and flowed to Europe, resulting in a reduction of China’s foreign exchange reserves by US$1 trillion. At that time, there were some phenomena, such as some Chinese entrepreneurs all over the world. Buy, buy, buy, buy overseas teams, movie theaters, hotels, wine estates, etc. The massive outflow of capital finally led to strict foreign exchange controls in 2016 and 2017. After the U.S. economy recovered, Trump launched a trade war and a technology war starting in 2018. Therefore, we must learn this lesson, keep a clear mind, maintain strategic determination, and do our own thing unremittingly to promote the high-quality development of the Chinese economy.
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