How big is the reserve of Chinese patience and prudence?

How big is the reserve of Chinese patience and prudence?

By Arthur Dunn


The real prospects for further global gain in China really exist. Having accumulated unprecedented economic potential over the years of reform, having built up its own military power, skillfully using the tools of economic influence, China managed to strengthen its influence in a number of key regions of the world that were not deprived of persistent American attention (in the Middle East and in Africa, in Latin America and Southeast Asia). Having created in his person a strong global player, he threw an open challenge to the established world foundations and habitual American domination. China's global economic expansion, leading to squeezing competitors and weakening their former influence, significantly changes the picture of the world and the strategic balance in it.
However, such a close trade and economic relationship between the superpower and its main competitor, the unique interweaving of the two largest economies in the world and the coincidence of economic interests that did not exist before, help to mitigate the growing tension between them in the areas of military and strategic confrontation.
China’s influence on the United States is multifaceted and not so negative, as Donald Trump’s incessant harsh anti-Chinese spells are striving to regain America’s former greatness by pushing aside a powerful and dynamic rival whose economy has for decades supplemented the American one.

The perception of China as a regional adversary that significantly affects the economy and security of the United States was established four years before Donald Trump was elected president - in the US National Defense Strategy, updated in 2012. The growing influence of China in the APR, the expansion of Chinese capital abroad, led to the loss of the US monopoly position in this region, becoming a serious threat to them on a global scale.
Intertwined American-Chinese economic relations over the decades have turned China into a state with a unique geopolitical function. Combining at the same time the role of the main economic partner of the United States with the role of their main economic competitor, he strengthened his power, the eastern giant willy-nilly turned out to be the American "friend-enemy." Without its loans, the US federal government is unable to implement its own internal and external programs, without its exports, the US population will not be able to satisfy its consumer demand by 80%, without its workforce, numerous American enterprises that were bred in their search for cheap productive forces would stop China from the United States.
Having initially become one of the engines, and then turned into a hostage to the rapid Chinese revival, the United States, seeing the light, suddenly felt a real threat to its own economic power and global domination, a threat that Donald Trump, who embarked on the path of economic and political deterrence is a dynamic and powerful rival.

Perhaps no country in the world was mentioned by Trump during the 2016 presidential election in such a negative context as China. The future owner of the White House clearly did not stint on the accusations and threats against Beijing.
His particular discontent was caused by Beijing’s selective protectionist trade policy, in particular, restrictions on the export of raw materials, support for Chinese companies operating in the US market, an artificially undervalued yuan against the dollar, creating advantages for Chinese manufacturers and blocking the US desire to reduce the trade deficit with China, and also restrictions on foreign investment and infringement of intellectual property rights.
However, the Chinese side, which has long advocated the lifting of restrictions on exports of high-tech industries from the United States to China, ceased numerous investigations of China’s anti-dumping policy initiated by American courts, in favor of creating favorable conditions for Chinese investment in the United States.

The current foreign policy behavior of China shows that its leadership has so far shown the necessary restraint and seeks to avoid a similar development of the protracted conflict, not allowing it to go beyond the limits of a reasonable peaceful dialogue. But how big is the reserve of Chinese patience and prudence? Will the large-scale trade conflict between the two countries, fraught with upheavals for the entire world economy, turn into something more - an open unregulated confrontation of two nuclear powers for global hegemony? The possible development of events under the similar scenario causes fears of many.

According to official Chinese statistics, since the establishment of diplomatic relations between the United States and China, the volume of trade in goods between them has increased 233 times - from 2.5 billion in 1979 to 583.7 billion dollars in 2017. The volume of trade in services between the two countries in 2016 exceeded $ 100 billion. At the same time, bilateral mutual investments are rapidly increasing: at the end of 2016, their volume exceeded $ 170 billion.
In the trade in goods for 10 years, China is one of the fastest-growing US export markets. On average, exports from the United States to this country increase by 11% annually. China is the largest export market for Boeng airplanes and American soybeans: (26 and 56%, respectively), ranks second among importers of American agricultural products, automobiles and integrated circuits.
China has long been ahead of other countries in the number of tourists visiting the United States and in the number of students studying at American universities.
The mutual investment market is also developing rapidly. Chinese capital operates almost throughout the United States, creating more than 100,000 new jobs there. Imports from China can save up to 2 million jobs in the United States, and exports from the United States to China help to create and maintain up to 1 million jobs.
But the United States, in turn, is a major strategic foreign investor for China itself. The implementation on its territory of about 70 thousand large US investment projects totaling $ 80 billion has a positive effect on the labor market, tax deductions and growth of the PRC economy.
In this regard, the question arises: would not Trump's trade war prove to be in the end disastrous, not only for China, but also for America itself? Will his protectionist blow to Beijing back boomerang in Washington, from which it was delivered?


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