Country is becoming a leader in multilateral global governance: experts
China is expected to face increasing trade frictions, especially under the upcoming Trump presidency, and while they should not be exaggerated, the country should be prepared. China should also play a bigger role in pushing forward multilateral global governance, experts said on Thursday.
The comments were made after US President-elect Donald Trump stated, at his first press conference since the election on Wednesday (U.S. time), that the country was losing hundreds of billions of dollars annually on trade with China, Japan, Mexico and other countries. "We don't make good deals anymore," he said.
It is not the first time Trump has blamed China for the U.S.' trade deficit, which should not be taken seriously, as the U.S. is one of the major beneficiaries of global trade and will not abandon WTO rules, Sang Baichuan, director of the Institute of International Business at the University of International Business and Economics, told the Global Times on Thursday.
"When it comes to bilateral trade friction, both China and the U.S., as members of the WTO, will follow its dispute settlement mechanism. Anyone who imposes tariffs without respecting the related rules is driving itself away from commonly recognized international standards," Sang said.
"Since China's accession to the WTO, the U.S. has brought 20 WTO cases against China, more than twice as many WTO cases as any other WTO member has brought against China," according to the 2016 annual report on China's compliance with WTO obligations that the Office of the U.S. Trade Representative (USTR) presented to Congress on Monday.
The report also cited "the Chinese government's interventionist policies and practices, and the large role of State-owned enterprises in China's economy, which are the principal drivers of trade frictions."
"We disagree with the report, as China has been strictly obeying WTO regulations after its accession to the organization," Sun Jiwen, spokesman of Chinese Ministry of Commerce, told a press briefing on Thursday.
The U.S. government intends to file a complaint against aluminum subsidies with the WTO on Thursday, Reuters reported, citing a person familiar with the matter. The complaint will likely cite artificially cheap loans from Chinese banks and low-priced inputs for aluminum makers, according to Reuters.
U.S. protectionism
Protectionism is sure to become a major aspect of the upcoming Trump presidency, considering his firm attitude toward trade-related issues, Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation told the Global Times. "China should not be the first to start an anti-protectionism campaign, but we have to be well-prepared, and fight against protectionism," he said.
Although the U.S. is targeting countries such as Japan and Mexico, China is facing more pressure considering its bilateral trade volume with the U.S., Bai noted.
"The way we fight the rising protectionism should echo the pressure we undertake," he said.
"U.S. exports of goods to China totaled $116 billion in 2015, representing an increase of 505 percent since 2001," according the USTR report, making China the U.S.' "largest goods export market outside of North America."
As a large trading partner, China is dealing with increasing trade frictions, which is normal, Sang noted. "As a member of the WTO, China has accumulated experience in dealing with remedy measures, and we have talent in this aspect, which could help us handle rising disputes," he said.
A U.S.-led trade war, would mainly hurt its own multinational companies, which would accelerate division in its society, according to Sang.
Multilateral governance
Chinese President Xi Jinping will discuss the latest developments in China's economy and more inclusive globalization during his first visit to the Davos summit, which will run from January 17 to 20, in Switzerland.
There are some defects in global governance today. For example, free trade is overstressed but fair trade is ignored, interests of developed countries are overprotected and there is a lack of active participation from emerging economies in global affairs, Sang noted. "Also, as an important platform of multilateral governance, the G20 still lacks legitimacy," he said.
Western countries still play advantageous roles in current multilateral organizations such as the IMF and World Bank, Bai said, noting that BRICS nations should be involved more.
"Fortunately, we are seeing progress in some developing countries-led initiatives, including the 'One Belt, One Road' initiative and the Asian Infrastructure Investment Bank, and China is becoming a leader instead of a follower," he said.
