China to press ahead with promised countermeasures

Note: The following article is taken from the Chinese-language "Commentaries on International Affairs".

China's Ministry of Commerce announced on May 31 that China will establish a list of unreliable entities according to Chinese laws. Foreign enterprises, organizations and individuals that do not comply with market regulations, or violate the spirit of contract, block or cut supplies to Chinese firms for non-commercial reasons, and which seriously damage the legitimate rights and interests of Chinese enterprises, will be added to the list. Specific measures will be announced in the near future.

China's Ministry of Commerce in Beijing, China. [File Photo: IC]

These countermeasures are in retaliation against the recent move by the United States to place a number of Chinese companies on its Entity List, subject to export controls, without finding any proof of misconduct. The outside world should not be surprised by China’s countermeasures, imposed to safeguard its legitimate rights and interests.

Despite being forced to fight back in the ongoing trade war, China has always adhered to its principles: We are unwilling to fight, but not afraid to fight, and will fight when necessary. Beijing has responded adequately and effectively to the U.S. “carrot and stick” approach. For more than a year and a half, and with the utmost sincerity and efforts, China has conducted 11 rounds of high-level economic and trade consultations with the United States based on the principle of mutual respect, equality and mutual benefit, achieving positive progress. However, the US has repeatedly gone back on its word by raising tariffs. It even used state power to cut off the supplies provided by US companies to Chinese companies such as Huawei despite no evidence of misconduct being found, exerting extreme pressure on China in an attempt to deter the latter’s development.

If you want to talk, let’s talk seriously; if you want a fight, then make it a good solid battle. Since the United States has shown no sincerity and presses on at every stage, the Chinese side will meet the challenge head on, and see it through to the end. The Chinese side has been forced to fight, however its response has been well-thought out. It has proposed a slew of countermeasures including slapping 10 to 25 percent extra duty on $60 billion worth of US goods starting from June 1st.. It has warned America against using products incorporating imports of China’s rare earth resources to contain the development of China. It has further established the mechanism of an unreliable entity list. Taken together, they have proved that the Chinese side has sufficient policy tools in its armory to deal with the pressure coming from the U.S. side.

Former US president Jimmy Carter once commented that the United States is "the most warlike country in the history of the world." In comparison, “China has not wasted a single penny on war.” Instead it has invested its resources in high-speed rail construction and other projects. Indeed, China is a country that loves peace, exercises restraint, and focuses on development. It acknowledges that there is no winner in any trade war, and any suppression and counter-measure can only hurt both sides.

The Chinese side has never sought a trade war, but hopefully its deployment of policy tools will help the U.S. side recognize that a cooperative and mutually beneficial approach is the right means to achieve global development. The experience of the last year has proved that raising tariffs harms the interests of both China and the United States, and nor is it conducive to the whole world. A sudden cutoff of the global value chain will cause enormous damage to human technological progress and civilization. China has always regarded negotiation as the first and best option for resolving trade disputes. However, cooperation must be based on certain principles and negotiations must be sincere. The U.S. side should not overestimate its ability to control the global situation, nor should it underestimate China's ability to safeguard its own development rights.

No matter what actions the United States takes next, China will always stick to its principles: If you want to talk, the door is wide open; if you ask for a fight, then we’ll see it through to the very end.