Anticipated U.S. investigation targeting China's practices an 'abuse of status'
China has put a strong emphasis on intellectual property rights protections and urged all WTO members to respect the rules of the organization, the Ministry of Commerce said on Thursday as U.S. President Donald Trump prepares to launch a broad investigation into China's trade policies.
"China and U.S. trade cooperation is the 'ballast and propeller' of bilateral relations and is mutually beneficial. We hope the two countries will continue on a path of cooperation," Commerce Ministry spokesman Gao Feng said at a news conference.
Trump is expected to make a speech and sign a memorandum at the White House on Friday targeting China's intellectual property and trade practices, the CNBC news channel reported.
The Trump administration is considering initiating an investigation into Chinese trade practices under Section 301 of the Trade Act of 1974. It allows the head of state to unilaterally impose tariffs or other trade restrictions to protect U.S. industries from unfair trade practices of foreign countries.
Since the World Trade Organization was established in 1995, U.S. Section 301 investigations have not led to trade sanctions. It was adopted to levy tariffs against Japanese motorcycles, steel and other products in the 1980s.
If the U.S. initiates an investigation under Section 301, that would indicate that it wants to replace international law with its domestic law, said Zhao Ping, director of the department of international trade research at the China Council for the Promotion of International Trade.
"The move would be unreasonable and violate international practice," she said. "A U.S. attempt to use unilateralism to override multilateral rules would be an abuse of its status as a superpower on the world stage. It would show disrespect for other countries."
The Trump administration might do so partly because it is looking to "divert attention from his (Trump's) domestic economic weakness," she added.
China and the U.S. agreed to initiate a comprehensive 100-day action plan to address the trade imbalance in April. Under the plan, China will resume U.S. beef imports and allow rice imports for the first time.
China-U.S. trade volume reached 1.85 trillion yuan (2 billion) in the first half of this year, up 21.3 percent year-on-year, according to the General Administration of Customs.
Such a policy against China could "definitely harm workers and entrepreneurs in both countries", said Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation.
Wei Jianguo, vice-president of the China Center for International Economic Exchanges, said China's imports from the U.S. will increase faster than its exports in the second half of 2017, so the U.S. trade deficit with China is likely to be narrowed.
Wei said that the U.S. is expected to overtake the European Union as China's largest trade partner this year with such growth.
"The world economy is currently on track to recover, but uncertain and unstable factors still exist," said Gao.
"We are willing to work together with the U.S. to jointly promote China-U.S. economic and trade relations, as well as to inject fresh vitality into the world economy."