Why are more U.S. enterprises seeking cooperation with China?

China Plus Published: 2018-07-12 11:23:43
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Note: The following is an edited translation of a commentary on the U.S.-initiated trade dispute from the Chinese-language "Commentaries on International Affairs (国际锐评)".

On July 10th, the U.S. Trade Representative announced that Washington was preparing to impose 10 percent tariffs on another 200 billion U.S. dollars worth of Chinese imports. If the additional duties take effect, more than half of Chinese imports will not be able to enter the American market. 

Lately, more and more American companies and people have seen the adverse effect brought about by the White House's "trade terrorism" policies, and have begun to seek long-term cooperation with China.

Tesla CEO Elon Musk

Tesla CEO Elon Musk [File Photo: AP]

On July 10th, U.S. electric car producer and energy firm Tesla signed an investment agreement with the Shanghai municipal government on a pure electric vehicle project, planning to build its first overseas plant in China. The factory has a planned annual capacity of 500,000 electric cars, and construction will begin early next year. On July 11th, Chicago Mayor Rahm Emanuel, leading a trade and business delegation to China, signed the "2018-2023 Key Sectors Joint Work Plan" in Beijing with eight Chinese cities, in a bid to further bilateral cooperation in key sectors including medicine and healthcare, advanced manufacturing, innovative technologies, financial services, agriculture, food and infrastructure. This is the first five-year plan signed between local governments of the two countries.

On one hand, the White House has kept imposing trade barriers on Chinese products, increasing its own consumers' expenses; on the other hand, famous U.S. enterprises are seeking extensive cooperation with China. This reflects the fact that although the White House's trade protectionist tendency is strong, many local governments and enterprises in the U.S. have confidence in the Chinese market.

Tesla has been a pioneer and leader in the world regarding producing smart, luxurious electric vehicles. In 2017, Tesla doubled its sales in China, the world's largest vehicle market, with sales surpassing 2 billion U.S. dollars. Chicago, with the third largest economic volume in the U.S., enjoys the biggest futures exchange in the world, with 20 percent of the world's commodities futures, including soy beans and cotton, trading there. The trade volume surpasses one trillion U.S. dollars. Since a joint working group on trade and investment cooperation between Chicago and eight major Chinese cities was set up in 2013, remarkable achievements have been made, such as an innovation center in Qingdao's Chip Valley, subway projects in Chicago conducted by CRRC Qingdao Sifang, warehouses set up by cross-border e-commerce firms from Hangzhou, and the Shanghai Shibei Hi-tech Park American Innovation Center. All of those projects have significantly benefited both sides. Therefore, both American enterprises and local governments regard the Chinese market as important for achieving their ambitions. However, the Trump administration is pouring cold water on them by wielding the "tariff stick." As such, coming to China to grasp the opportunities brought by China's expanding opening up and innovation-driven development has become their choice to create a better future.

From motorcycle maker Harley-Davidson and Mid Continent Nail Corp, to Tesla and the Chicago municipal government, there are more and more voices saying "no" to the White House's additional tariffs. A few days ago, the Columbia Broadcasting System, taking iPhone for example, pointed out that China gains very low additional value from its trade with the U.S, thus it's pointless for the U.S. to ignite a trade war against China. Besides, the U.S. Chamber of Commerce as well as some senior congress persons have strictly criticized the government's latest moves to impose tariffs, warning that American families will eventually have to suffer.

In fact, the silent majorities of the political and business circles in the U.S. are seeing the nature of the White House's trade policies, which is "egomania" and makes its policy makers focus only on partisan wars and votes while ignoring the interests of the public. According to the Washington Post, 78 percent of the interviewees from the swing states, which will decide the results of this year's mid-term election, believe that a trade war against China is unfavorable for the prices of American goods. As the negative effects of additional tariffs gradually emerge, more and more American people will wonder: Where will such a government, out of rationality, bring its nation and its people? 

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LU Xiankun Professor LU Xiankun is Managing Director of LEDECO Geneva and Associate Partner of IDEAS Centre Geneva. He is Emeritus Professor of China Institute for WTO Studies of the University of International Business and Economics (UIBE) and Wuhan University (WHU) of China and visiting professor or senior research fellow of some other universities and think tanks in China and Europe. He also sits in management of some international business associations and companies, including as Senior Vice President of Shenzhen UEB Technology LTD., a leading e-commerce company of China. Previously, Mr. LU was senior official of Chinese Ministry of Commerce and senior diplomat posted in Europe, including in Geneva as Counsellor and Head of Division of the Permanent Mission of China to the WTO and in Brussels as Commercial Secretary of the Permanent Mission of China to the EU. Benjamin Cavender Benjamin Cavender is a Shanghai based consultant with more than 11 years of experience helping companies understand consumer behavior and develop go to market strategies for China. He is a frequent speaker on economic and consumer trends in China and is often featured on CNBC, Bloomberg, and Channel News Asia. Sara Hsu Sara Hsu is an associate professor from the State University of New York at New Paltz. She is a regular commentator on Chinese economy. Xu Qinduo Xu Qinduo is CRI's former chief correspondent to Washington DC, the United States. He works as the producer, host and commentator for TODAY, a flagship talk show on current affairs. Mr. Xu contributes regularly to English-language newspapers including Shenzhen Daily and Global Times as well as Chinese-language radio and TV services. Lin Shaowen A radio person, Mr. Lin Shaowen is strongly interested in international relations and Chinese politics. As China is quite often misunderstood in the rest of the world, he feels the need to better present the true picture of the country, the policies and meanings. So he talks a lot and is often seen debating. Then friends find a critical Lin Shaowen criticizing and criticized. George N. Tzogopoulos Dr George N. Tzogopoulos is an expert in media and politics/international relations as well as Chinese affairs. He is Senior Research Fellow at the Centre International de Européenne (CIFE) and Visiting Lecturer at the European Institute affiliated with it and is teaching international relations at the Department of Law of the Democritus University of Thrace. George is the author of two books: US Foreign Policy in the European Media: Framing the Rise and Fall of Neoconservatism (IB TAURIS) and The Greek Crisis in the Media: Stereotyping in the International Press (Ashgate) as well as the founder of chinaandgreece.com, an institutional partner of CRI Greek. David Morris David Morris is the Pacific Islands Trade and Investment Commissioner in China, a former Australian diplomat and senior political adviser. Harvey Dzodin After a distinguished career in the US government and American media Dr. Harvey Dzodin is now a Beijing-based freelance columnist for several media outlets. While living in Beijing, he has published over 200 columns with an emphasis on arts, culture and the Belt & Road initiative. He is also a sought-after speaker and advisor in China and abroad. He currently serves as Nonresident Research Fellow of the think tank Center for China and Globalization and Senior Advisor of Tsinghua University National Image Research Center specializing in city branding. Dr. Dzodin was a political appointee of President Jimmy Carter and served as lawyer to a presidential commission. Upon the nomination of the White House and the US State Department he served at the United Nations Office in Vienna, Austria. He was Director and Vice President of the ABC Television in New York for more than two decades.