The ministry of commerce expressed strong discontent on Monday with the United States' initiation of a Section 301 investigation into so-called Chinese intellectual property theft, pledging China will take all measures necessary to defend its lawful interests. Beijing Youth Daily commented on Tuesday:
The investigation has raised deep concerns that it might sabotage China-US trade ties, as the domestic statute invoked represents an obsolete, unilateral approach to bilateral trade issues. By pressing ahead with this course of action, which is essentially symbolic, the Trump administration apparently has more than just the investigation in mind.
In the face of mounting pressures at home and abroad, from the criticism of his response to the Charlottesville unrest to the nuclear ambitions of the Democratic People's Republic of Korea, President Trump has felt the urge to distract public attention. China, not surprisingly, is in his cross hairs.
Seven months into his presidency, Trump seems to be stuck in second gear while pursuing his campaign goals. But his portrayal of China is in line with US right-wing politicians, who tend to blame the Korean Peninsula crisis and US trade deficit on Beijing. The decision to kick start the 301 investigation against China, therefore, is also about securing his political base.
The truth is that the investigation is not likely to reverse the progress made by both sides in deepening bilateral cooperation. On the one hand, Trump's scheduled visit to Beijing later this year will add more certainty to China-US coordination on the DPRK nuclear issue.
On the other hand, it is evident that a trade war between the world's largest and second-largest economies will spill over into the global market, particularly in Asia.
Beijing is right to practice patience and caution, but it will not shy away from using countermeasures if the investigation triggers extra tariffs on Chinese imports and the suspension of trade exchange deals.
Beijing's enhanced protection of intellectual property rights aside, the bulk of Washington' allegations are about striking a balance between investing in the Chinese market and the transfer of US technologies, so a consensus should be reachable during the yearlong investigation.
