China can best answer Trump’s trade threats by improving its own economy
Zhou Xin says concern about potentially damaging US trade policies should lead Chinese leaders to take stock, and put their own house in order
A full-blown trade war would be bad news for China. After all, China’s rise to a world economic powerhouse over the past decades has been based on its integration into a US-led global capitalist system. Now, Trump is threatening to unmake it. No country has gained more from globalisation and, accordingly, the stakes are very high for China.
To make matters worse, Trump’s blustering comes at a time when China’s economy is losing its shine. Its double-digit growth rate has long gone; the renminbi has been weakening continuously against the dollar; the country is no longer an ideal place to make things for many companies; and, its image as a promising land with 1.3 billion potential clients is being quickly tarnished by an intrusive state apparatus.
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If there is a silver lining in the gathering storm, it would be this: the challenge could spur Chinese leaders to take stock of what the country has been doing right, and what it can do to help itself – and the world – in the Trump era. As Winston Churchill put it, “The farther back you can look, the farther forward you are likely to see”. Beijing could borrow a few pages from its own recent history to deal with a “hostile” America.
Sino-US ties were volatile in the 1990s when Washington sent aircraft carriers into the Taiwan Strait in 1996 in response to Beijing’s missile firing in the waters around Taiwan, and when bilateral exchanges ground to halt after a Nato bomb hit the Chinese embassy in Belgrade, triggering massive anti-US protests on the streets of Beijing and Shanghai.
Nonetheless, the hostilities did not deter Beijing from opening up its market wider to external investment and seeking membership of the World Trade Organisation. On November 15, 1999, Chinese premier Zhu Rongji (朱鎔基) skipped the Communist Party’s biggest annual economic meeting that he was to preside over, so he could meet visiting US trade delegates to ink a deal on WTO membership.
