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US deficit claims can be misleading, report says
Last Updated: 2019-06-08 03:30 | China Daily
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The United States' trade deficit with China is not a matter of simple, objective truth. It has been brought on by actions of the US itself — a combination of export controls, market restrictions, competition, trade policies, currency dominance and other factors — officials and experts said in response to a report from the Ministry of Commerce on Thursday.

The report said bilateral trade has been mutually beneficial, and the US has reaped substantial benefits from cooperation.

"China-US economic and trade cooperation has reached unprecedented depth and breadth," the report said, noting that bilateral trade surged to $633.5 billion last year, about 252 times that of 1979.

Since the current US administration took office, it has ignored that, said Gao Feng, the ministry's spokesman.

The US has propagated the notion of a "loss" of US trade with China and uses the deficit as an excuse to provoke economic and trade friction, he said, adding that the study was based on concrete facts and figures showing the nature and causes of the deficit.

The report shows that the US has made great profits from trade with China, Gao said.

The report found that bilateral trade in services exceeded $125 billion in 2018, and two-way direct investment has totaled nearly $160 billion in the past four decades.

It noted that China's surplus comes mainly from labor-intensive products, and the country saw deficits for products including aircraft, integrated circuits, automobiles and agricultural products, indicating that both countries have capitalized on their respective industrial advantages.

"Strict controls by the US over exports to China is one of the important reasons for the trade deficit," the report said, adding that the measures involve around 3,100 items in 10 categories, mostly high-tech products.

Tom Harper, a researcher at the University of Surrey in southeastern England, said since the Sino-US trade friction escalated, the impact is already being felt on global supply chains. For example, China has sought to move away from the US to other countries for the goods it needs. Brazil, for example, has begun to supply China with soybeans previously bought from the US.

These moves demonstrate the dangers of trade conflicts, with US farmers bearing the brunt of Chinese tariffs, Harper said.

Wei Jianguo, vice-president of the China Center for International Economic Exchanges, warned that although China would not be happy to see the so-called trade war expand into the fields of finance, technology or geopolitics, the country must be prepared for all kinds of confrontations.

"The US has repeatedly violated the multilateral mechanism based on World Trade Organization rules. Due to the influence of hard-line hawks, it is likely to continue the trade war," he said.

Contact the writers at renxiaojin@chinadaily.com.cn

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US deficit claims can be misleading, report says
Source:China Daily | 2019-06-08 03:30
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