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Über dieses Buch

This book focuses on the current tension between China and the US on trade imbalance and discusses China’s opening-up strategy in the context of this trade conflict. The book is divided into two parts. In the first part, the author presents a detailed analysis of the current state of the China-US trade relationship and describes the potential impacts of China-US trade conflicts. The topics covered in this section include the re-estimate of US trade deficit with China, China’s non-market economy status, the impact of China-US bilateral investment treaties on China’s manufacturing sectors, and the estimated welfare losses and gains resulting from the China-US trade war. Part II explores China’s possible response and development strategy in the context of de-globalization. Based on an overview of China’s three stages of economic reform and opening-up policy in the past four decades, the author discusses the future tasks that would move the country into a new stage of all-round opening up. Lastly, the book comprehensively reviews the role of processing trade, trade liberalization, and firm performance in promoting China’s miraculous economic growth so as to foster a better understanding of China’s experience of opening up over the past 4 decades.

Inhaltsverzeichnis

Frontmatter

Articles

Frontmatter

Chapter 1. China’s Trade Development and Opening-Up Policy Design over the Past Four Decades

China’s opening-up in the past four decades has gone through three waves: the extensive margin of opening-up (1978–2001), the intensive margin of opening-up (2001–2017), and all-around opening-up (since 2017). This paper explores these three stages of the country’s economic reform. China’s gains from trade have been inspired by different economic factors. Before the turn of the century, the large trade volume was due to the realization of comparative advantage based on the country’s factor endowment. However, after its accession to the World Trade Organization, China’s gains from trade have been due, in large part, to the realization of economic scale effects associated with the larger market.

Miaojie Yu

Chapter 2. Processing Trade, Trade Liberalization, and Opening-Up: China’s Miracle of International Trade

Understanding the role of international trade is the key to understanding China’s miraculous economic growth. This paper reviews the literature on international trade in the context of China, with a focus on processing trade, trade Liberalization, and firm performance to provide a better understanding of China’s experience opening up over the past 4 decades.

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Chapter 3. Understanding the Recent Sino-U.S. Trade Conflict

To understand Sino-U.S. trade relations and the trade imbalance, this article interprets the trade imbalance between China and the United States from the Trump administration’s perspective. It analyses the development of the Sino-U.S. trade conflict by examining Sino-U.S. trade data. The Trump administration claims that the Chinese government’s subsidies for exporters and high import tariffs are the main causes of the Sino-U.S. trade deficit, resulting in the loss of nearly three million jobs in the U.S. manufacturing industry. The Trump administration therefore argues that limiting Chinese exports to the United States by imposing high tariffs can resolve the trade deficit, keeping China in the middle and low end of the global value chain. The article finds that U.S. statistical accounting of the trade volume between the two countries ignores important features of re-exports and overestimates the size of the trade deficit. Reducing China’s imports cannot directly increase U.S. employment, and China’s exports provide the United States with low-price and high-quality products. Chinese investors tend to invest the trade surplus in the United States by purchasing U.S. Treasury bonds, benefiting the U.S. economy. China’s large trade surplus mainly comes from labor-intensive products, while in capital-intensive products the surplus in value-added is small. In addition, China’s tariff policies are in line with the World Trade Organization’s rules, and the United States also limits Chinese investments due to “national security” concerns. China’s upgrading to the middle and high end of the global value chain is an inevitable consequence of economic development. Therefore, China and the United States should increase the size of bilateral trade and rebalance Sino-U.S. trade toward a sustainable direction by seeking economic and trade cooperation via trade negotiations.

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Chapter 4. The Day After Tomorrow: Evaluating the Burden of Trump’s Trade War

During his U.S. presidential campaign Donald Trump threatened China with the imposition of high import tariffs on its exports to the United States. To evaluate the repercussions of such an action, this paper uses Eaton and Kortum’s 2002 multi-sector, multi-country general equilibrium model with inter-sectional linkages to forecast how exports, imports, output, and real wages would change if the Trump’s threat of 45% tariffs is carried out. To view plausible scenarios, we evaluate the case of a unilateral action on the part of the United States, as well as a scenario where China retaliates by imposing an equally high 45% tariff on its imports from the United States. In addition, since the high U.S. trade deficit with China is a factor which underpins calls for tariff action, we explore simulations where the trade balance is restored to balance as well as a scenario in which the trade balance is unchanged. In all of the scenarios, the calibration exercise suggests that a trade war triggered by high U.S. import tariffs will lead to a collapse in U.S.-China bilateral trade. In all of the scenarios, the United States will experience large social welfare losses, while China may lose or gain slightly depending on the effect of trade war on the U.S.-China trade balance. Globally, some small open economies may experience small benefits, while other countries may suffer collateral damage.

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Chapter 5. The Status of China’s Market Economy and Structural Reforms: Essentials Behind the China-U.S. Trade War

This paper investigates the most essential issues behind the ongoing U.S.-China trade war. In addition to the apparent bilateral trade imbalance, China’s status as a non-market economy, as labelled by the Trump administration, is one of the most fundamental reasons that the United States triggered the U.S.-China trade war. Accordingly, America’s most pressing request is to urge China to implement further structural reform. This paper argues that the current Chinese economy is quickly becoming a modern market economy with a unique Chinese character. This is evident from the ongoing structural reform to create a competitive environment between state-owned enterprises (SOEs) and private enterprises, and through a further opening-up of the market by guaranteeing a wider and deeper market access for inbound foreign direct investment (FDI).

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Chapter 6. Three Tasks for Building an All-Around Opening-Up Strategy

The 19th National Congress of the Communist Party of China (CPC) report states that a new pattern of increased reform and opening-up should be fostered in China. To this end, I believe China’s efforts should be focused on three aspects: (i) deepening the reform of free trade zones and accelerating the development of free trade ports; (ii) constructing an appropriate top-level design and prioritizing the development of the Guangdong-Hong Kong-Macau Greater Bay Area; (iii) continuously improving the experimental work for building a new, open economy.

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Chapter 7. China’s Free Trade Ports: Effective Action Against the Threat of De-globalization

With sluggish external demand and increasing trade protectionism by the USA and the European Union, China is facing severe challenges in implementing its deeper, ongoing reforms. To respond actively to such challenges, the Communist Party of China’s 19th National Congress proposed to “promote a new pattern of all-around opening up”. In particular, the establishment of free trade ports is considered an important means to realize deeper integration with the world economy. This paper discusses the background, the motivation, the possible challenges as well as a feasible path for the successful implementation of free trade ports in China. Based on the international experience, the construction of free trade ports in China requires freer trade in goods, high mobility of talent and free capital flow.

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Chapter 8. Expanding Opening Up: China’s Olive Branch to Globalization

After four decades of reform and opening up, China must decide where to lead her future efforts. Threatened by the rising trade protectionism, the world is eager to know whether China will stick to the path of opening up. In his impressive keynote speech at the opening ceremony of Boao Forum for Asia (BFA) Annual Conference 2018, President Xi Jinping spoke highly of reform and opening up policy, which profoundly changes China and deeply influences the world. Besides, the president explicitly expressed China’s determination to open up to the outside world by putting forward a four-pronged approach.

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Chapter 9. Potential Impact of China–U.S. BIT on China’s Manufacturing Sectors

This article finds that the overall effect of the foreign direct investment (FDI) and thereby the China–U.S. bilateral investment treaties (BIT) on Chinese manufacturing sector is positive, which raises the productivity and profitability of the firms, using various econometric models and other evidence. The manufacturing sector as a whole has already opened up to the world economy and needs to continue this process.

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Chapter 10. RMB Internationalization and Belt and Road Initiative

This paper evaluates the implication of RMB internationalization on economic integration between China and its partners, especially for Belt and Road countries. We collected data of all bilateral swap agreements between 2000 and 2016, and empirically explored the role of bilateral swap agreements playing in the bilateral trade flows between China and its partner countries.

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Chapter 11. Exceptional Performance of Chinese Outward Direct Investment Firms

This paper finds that Chinese manufacturing firms that engage in outward foreign direct investment (ODI) have better economic performance than non-ODI manufacturing firms. Overall, ODI firms are more productive and have higher profitability than non-ODI firms. The sector analysis shows that the exceptional performance is significant for labor-intensive industries. Finally, the ODI activity can raise the productivity of other firms in an industry.

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Chapter 12. Forty Years of Opening Up Has Greatly Benefited China’s Foreign Trade

It has been four decades since China embarked on the great course of reform and opening up in 1978. Over the past four decades, the Chinese economy has maintained an average annual growth of 8%, which was unprecedented in human economic history.

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Chapter 13. China’s Opening-Up Policies: Achievements and Prospects

China began its era of reform and opening up in 1978, which profoundly changed China and has deeply influenced the world.

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Columns and Media

Frontmatter

Chapter 14. Trade Talk

In an academic area lacking Chinese representation, a Chinese economist is building an international reputation by deftly deciphering China’s global economic role. NewsChina talks with him about his research and what the country can do to spur growth.

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Chapter 15. Booming Chinese Investment a Key Factor in Fighting African Poverty

TODAY, Africa-China trade and investment plays a crucial role in fostering the African economy. Data shows two-way trade and investment contributes about 20% of African economic growth. China has been Africa’s largest trading partner since 2008. Last year, trade between China and Africa reached US$178 billion—18,000 times larger than that in six decades ago. Africa-China trade has also updated its structure and components over time.

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Chapter 16. Minor U.S. Trade Sanctions on China Possible, Experts Say

BEIJING (MNI)—A possible investigation that could lead to trade sanctions on China by the U.S. may be postponed amid the two countries’ stronger cooperation on Korean peninsula denuclearization and objections from the U.S. business community, although some China trade experts interviewed by MNI believe small-scale sanctions are possible in the future.

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Chapter 17. China Slashes Tariffs on Range of Consumer Goods

BEIJING (MNI)—China is reducing tariffs on a wide range of consumer goods by an average of almost 10% points, a move analysts say advances the government’s supply-side reform agenda while it opens domestic producers to more competition.

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Chapter 18. Evaluating the Burden of a U.S.-China Trade War

Trade disputes between the United States and China greatly intensified recently as the two countries announced a 25% tariff hike on $50 billion worth of products imported from each other, raising the risk of a trade war between the two giant trading economies. Based on a standard multi-sector, multi-country general equilibrium trade model with input-output linkages, we evaluate the cost of a trade war in which the United States and China both increase their tariffs to 45% for all imports from each other. We find that the United States would be more likely to be the bigger loser and that the cost for China would be moderate.

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Chapter 19. Sino/US Trade War Could

If U.S. Increases Pressure On Beijing, China Ready To Act: Advisor

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Chapter 20. Chip Wars—Tech Rivalry Underlies U.S.-China Trade Conflict

HONG KONG—Chinese and American officials will be trying to defuse tensions pushing the world’s two largest economies toward trade war in meetings beginning Thursday where analysts say chances for a breakthrough seem slim given the two sides’ desperate rivalry in strategic technologies.

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Chapter 21. Trump’s Latest Tweets Create Another Twist in U.S.-China Trade Talks

With a couple of tweets, U.S. President Donald Trump may have brightened the mood of this week’s trade talks between China and the United States.

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Chapter 22. China Engages U.S. to Deescalate Trade War

BEIJING (MNI)—Chinese trade officials have quietly approached their U.S. counterparts seeking ways to minimize punitive tariffs on Chinese exports and avoid a full-blown trade war, MNI learned from a source with knowledge of the matter.

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Chapter 23. Exporting Trade Turbulence

The US-China trade conflict may reshape the global supply chain, involving production and investment around the world. The fallout is likely to affect everyone.

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Chapter 24. Trump Threatens Tariffs on All Chinese Goods

President Donald Trump has upped the ante in the trade dispute with China, threatening now to impose tariffs on all Chinese goods entering the United States.

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Chapter 25. US Firms Express Optimism in China’s Import Expo

US companies said they have high expectations for the forthcoming China International Import Expo (CIIE) and are confident in the Chinese market.

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Chapter 26. China-US Deal Likely by Mid-Year: China Advisors

BEIJING (MNI)—A deal between China and the U.S. to resolve their year-long trade dispute is likely to come by the end of June, although the timing of a proposed presidential summit to seal an agreement is still unclear, Chinese trade advisors told MNI.

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Chapter 27. Extension Over Concessions for China

BEIJING (MNI)—China may prefer to extend trade talks with the U.S rather than offer too many concessions to Washington’s demands, as conceding ground could be worse than any additional tariffs, advisors to the government have told MNI.

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Chapter 28. The American Consumers Are Going to Pick up the Bill as Consumer Goods Become the Next Target

The trade war between China and the United States could go on for another decade and hurt Americans more, experts warned on Monday during a seminar at the Renmin University of China, where 10 Chinese academics gave their analyses on the ongoing dispute. They believe that with strategic thinking and staying power, China can use the situation as an opportunity to upgrade its economy.

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Chapter 29. Depreciation Was Not Deliberated, but Rather a Result of ‘Market Panic’ Triggered by the US

China says ‘no such thing’ as currency manipulation despite US claim. US Treasury declared China a currency manipulator on Monday after the yuan fell below the key threshold of 7 to the US dollar for the first time since 2008

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Chapter 30. Yuan Depreciation to Slow, May Reverse

The pace of yuan depreciation should slow, and perhaps reverse, in coming months, as it finds support from economic fundamentals, government advisors told MNI, arguing that a weaker currency would not be in China’s interests.

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Chapter 31. Late-September China-US Meeting Likely

A meeting between Chinese and U.S. trade negotiators is likely to proceed this month, although expectations for progress should be limited, government advisors told MNI.

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Chapter 32. Speaks at the Yenching Academy

On the morning of September 5, the 5th Annual Opening Ceremony of Yenching Academy commenced at Peking University’s Qiulin auditorium to welcome the newest scholars of 2019 cohort and inaugurate the new academic year.

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Chapter 33. China Will Never Manipulate Its Currency

The United States accused China of currency manipulation last month, saying it intentionally depreciated the renminbi, or yuan, against the US dollar to put US exports in an “unfair” position. While it was the fifth attempt by the US to label China a currency manipulating country, the accusation is untenable and unreasonable. China never manipulates its currency.

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Chapter 34. A Deal Between China and the US Could Feasibly Be Signed by the End of December

BEIJING (MNI)—Chinese President Xi Jinping and U.S. counterpart Donald Trump could sign a preliminary trade deal during the APEC meeting in Chile in mid-November, perhaps opening the way to a second-phase deal including guidelines on managing the yuan, government advisors told MNI.

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Chapter 35. Commented on the Third RCEP Summit

BANGKOK, Nov. 4 (Xinhua)—Fifteen participating countries of the Regional Comprehensive Economic Partnership (RCEP) will start legal preparations for the signing of the mega free-trade pact in 2020, after concluding text-based negotiations and essentially all market access issues.

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Chapter 36. China’s Faster Growth Will See Yuan Go up to 6.0 Against Dollar

The yuan is likely to appreciate to around 6.8 against the US dollar in three months, and is expected to rise to around 6.0 in three years.

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Chapter 37. RRR Cut to Reduce Financing Problems for Companies

In China’s current economic situation, a RRR cut will help better solve corporate financing problems and boost investment to expand production, thereby driving economic growth.

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Chapter 38. China Readies Washington Trip, Phase 1 Signing

BEIJING (MNI)—China is set to send a delegation to Washington next week to sign a phase one trade deal with the U.S., a source close to the Ministry of Commerce told MNI, adding that China’s decision not to increase grain import quotas would not prevent it from meeting commitments to buy more American farm goods.

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Backmatter

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