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2020 | OriginalPaper | Chapter
5. The Status of China’s Market Economy and Structural Reforms: Essentials Behind the China-U.S. Trade War
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Abstract
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).