Nobel laureate believes trade relationship with China beneficial to U.S.

Updated 2017-08-29 14:00:20 Xinhua

"Our trade relationship with China is not detrimental to the U.S., even though it could be improved," underlined Nobel Prize-winning economist Roger Myerson in an interview with Xinhua during the 6th Lindau Nobel Laureate Meeting on Economic Sciences, which closed last weekend in the southwestern German city of Lindau.

The laureate of the 2007 Nobel Prize in Economics was disappointed by the U.S. government's decision to launch a Section 301 investigation into alleged intellectual property practices by China under a rarely used 1974 trade law, saying "it's very sad."

The illusion that relying on its trade surplus China wins in relation to the United States is neither objective nor wise. China's trade surplus was repeatedly emphasized by U.S. President Donald Trump during his presidential campaign last year. Myerson said that America's trade deficit is not about winning or losing.

Myerson said that Americans are buying more from China, which means the Chinese people are sending more things of value to enrich the lives of Americans than Americans are sending to enrich the lives of Chinese.

"One could equally well say the deficit means that Chinese people are losing in the relationship with the U.S.; after all they are sending us more value than that we are sending to China." Myerson argued.

The American economist said a trade deficit means U.S. dollar debt and other U.S. financial assets have been valued as long-term investments by other countries including China, which has helped the United States finance its federal debt.

"If people want to invest in U.S. dollars, then the result could be a trade deficit," Myerson said, adding that demand for U.S. dollar debt in particular is part of the trade relationship.

When it came to the economic growth, Myerson regarded China as a strong country despite the anticipated deceleration in its economy amid ongoing structural changes, saying the rapid growth in the past decades was "by any standards a great accomplishment of the Chinese government and probably the best thing for humanity."

In his view, "rather than threatening trade, the U.S. should try to address Chinese long-term security concerns."

Myerson sees China's response to the Korean Peninsula nuclear issue as "very appropriate", while calling on the U.S. government to try to make the regime in the Democratic People's Republic of Korea (DPRK) feel less threatened by the U.S. and its allies in East Asia, which might help to reduce the DPRK's desire to build up its nuclear arsenal.

"If you behave badly in some vague way, we might totally destroy you," Myerson said of the U.S. approach to the DPRK. "That scares people."

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