Expert says U.S. needs to better understand trade imbalance with China

Updated 2017-04-28 14:31:05 Xinhua

Despite the huge potential for U.S.-China cooperation, the lack of mutual trust and deep-rooted misunderstandings prevented the two countries from moving closer on trade as well as other issues, Anthony Saich, a leading U.S. expert on China told Xinhua in a recent interview.

As he sees it, there are three common misunderstandings in the United States about China that contributed to the mistrust, said Saich, the director of Ash Center for Democratic Governance and Innovation and a professor of international affairs at Harvard's Kennedy School of Government.

The first is about the substantial growth of U.S. exports to China in the past 15 years, which is often neglected or played down by U.S. politicians seeking to create the impression that China inundates the U.S. market with its manufactured goods.

"I was looking at some figures recently. U.S. exports to China have gone up 500 percent since China entered the World Trade Organization, which is a counter to the normal rhetoric," he said.

The second is the simplistic view of U.S.-China trade imbalance based only on trade figures.

"It is about how do you count trade. A lot of what is exported from China the real value added is to American firms," Saich said, adding that "American investment into China is much more globally integrated than Chinese investment into the U.S. at the moment."

U.S. investments in China "play an important part in the U.S. economy, and an important part of the global production chain, that's not the case with Chinese investments into America...they're much more one-off, buying buildings which are overpriced and buying companies which are massively overpriced."

The third commonly-held misconception in the United States about China arises from the rhetoric that China steals U.S. jobs, said the expert.

"Chinese is not stealing American jobs, technology is stealing American jobs. The peak for U.S. manufacturing in terms of employment was well over 50 years ago and it has been in decline ever since, so it's technology that's taking the jobs not China," Saich said.

The two largest economies in the world are highly complementary to each other, Saich noted, as many pundits have pointed out.

For example, President Donald Trump listed infrastructure as a key part of his economic policy, and China has rich experiences in this aspect, he said. "That's an area that if facilitated could be hugely beneficial to the United States."

"Look how terrible the railway service is up and down the East Coast. I was stunned when I went to China and got on the high-speed rails. It's embarrassing coming back to AmTrak in America so those are kinds of areas where I think they're win-win," Saich added.

Saturday marks Trump's 100th day in the White House and there is already a torrent of media reports reviewing his performance as the U.S. president during the period, and China is often a crucial part of these reports, highlighting the fact that U.S.-China relations are the world's most important bilateral ties.

The recent meeting between Chinese President Xi Jinping and U.S. President Donald Trump at Mar-a-Lago may help reduce mutual suspicion between Washington and Beijing, according to Saich.

"I think the visit of President Xi was very helpful in terms of the two people interacting with one another. (It is) sending out a signal that whatever the differences are, we need to find a way to make the relationship work," he said.

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