Analysts urge China to "fight back" amid Sino-U.S. trade frictions

As the Sino-U.S. trade dispute escalates, economists from a leading Chinese think tank have called on China to fight to the end, and not to yield to pressure.

Trade frictions between China and the United States have continued to grow, as the American side threatens to impose tariffs on more products imported from China.

The move follows on the heels of the Section 301 investigation launched by the Trump administration last year into so called Chinese intellectual property and technology transfer practices.

Guo Kai, a member of Chinese think tank the China Finance 40 Forum, says the only way for China to solve the dispute is to fight back.

"If you take a closer look at the results of their Section 301 investigation, you find that most of the content is based on their own speculation. What they want has nothing to do with what they do, and their only goal is to impose tariffs. According to U.S. media reports, Trump once claimed he only cared about tariffs and had never considered anything related to intellectual property rights. Therefore, the trade war is totally U.S.-provoked. Under this circumstance, the only solution is to fight back," said Guo.

One of the Trump administration's justifications for the tariffs is that they help to solve what it sees as the problem of the United States trade deficit. 

But as Ha Jiming, a senior researcher also from the China Finance 40 Forum, points out, tariffs aren't a solution to America's economic problems.

Ha Jiming, a senior researcher from Chinese think tank China Finance 40 Forum. [Photo: China Plus]

"Figures have shown that the employment growth in the United States is far below market expectations, yet salary levels continue to rise. If more tariffs are imposed, inflation will rise, making the Federal Reserve increase the interest rate. The influence on capital market will negatively affect the real economy, which might further affect people's retirement funds," said Ha.

Since President Trump announced on March 1st that he would impose tariffs on imports of steel and aluminum, the U.S. stock market has shrunk by 800 billion U.S. dollars, an amount equal to four percent of the country's GDP.

Ha Jiming thinks that a trade war between China and the United States could be a major blow for the global economy and may trigger a deep recession.

In the face of the recent threats from the United States, China has steadfastly held to its position that it is fully prepared and will not hesitate to strike back fiercely in response to U.S. tariff escalations.

At the same time, it has continued to open its market and promote trade liberalization and investment facilitation.

Analysts believe that by expanding its market, China has been sharing the benefits of its economic growth with the world, and in doing so is contributing to the multilateral trade system.