Lujiazui, Shanghai's financial center, provides a stunning backdrop to the Bund. [Photo by Wang Gang/For China Daily]
Assuming that the measures US President Donald Trump has taken in the first few weeks in office reflect, a new and sustainable path for the United States, instead of whims, will they have an impact on China's economic prospects?
Before addressing this question, we should analyze the structural strengths of China, "structural" in this case being those strengths that do not depend on external factors. There are at least six such structural factors in China's favor.
First, the large size of China's domestic market guarantees low average production costs and, therefore, relatively low prices of its high-tech and heavy industrial goods and economies of scale. Hence, whether or not China has access to external markets, its enterprises can produce at competitive prices even in the most complex and large-scale sectors.
Second, according to World Bank, the savings-to-GDP ratio of China (over 44 percent) is much higher than those in most Western economies (about 18 percent in the US) and the world average (27 percent). This creates for China a large margin to increase consumption without endangering macroeconomic stability. In the face of trade conflicts, this might help mitigate the impact of declining exports on China's GDP.
Third, China has invested in high-quality education, which has helped create a very productive and adaptable labor force. An educated population can better comprehend budget constraints, the value of forfeiting short-term aspirations for long-term national strategic objectives, and the broad set of contesting factors that ought to be contemplated when drawing development policies, all of which feeds into high levels of social cohesion, a critical factor in determining the investment ratio and GDP growth.
Fourth, since ancient times China has cultivated an appetite for knowledge and technological solutions to production problems. China invented gunpowder, mechanical clocks, the compass, printing and paper, among other things. After the launch of reform and opening-up in 1978, substantive budget allocations for research and development have strengthened the quest for science, enabling the country to compete with the West in several cutting-edge fields.
Fifth, in terms of sustaining economic growth, China's political system has strengths that are not found in Western economies. The Chinese leadership is pragmatic when choosing and implementing economic policies. For instance, "what matters is that the cat catches mice, no matter black or white". Therefore, the leadership can and is willing to pick from a whole array of fiscal and monetary tools and use them to achieve its goals. Besides, China's political system warrants not only social stability but also the continuity of the objectives, strategies and policies, all of which encourage private capital to invest and take risks in long-term ventures.
Finally, starting in 1840 through 1945, China endured attacks and invasions by Western powers and some neighbors. These more than 100 years of aggression, known in Chinese narrative as "the century of humiliation", are very much instilled into the Chinese psyche, affording a need for unity, self-protection and national strength, which call for hard work, sacrifice, entrepreneurship and social cohesion. This not only facilitates the work of the Communist Party of China, which played a key role in bringing to an end that "humiliation", but has also positively contributed to the competitiveness of the economy.
The West might choose to intensify its animosity toward China, ignited chiefly by economic fears, with tariff wars aimed at halting its progress, thus ignoring that China's structural-historical factors ensure the country's progress with its own dynamics and self-sustainability. True, some sources estimate China exports-GDP ratio amounts to nearly 18 percent. But if tariffs reduced its exports to 14.4 percent of GDP, though a very unlikely event, domestic consumption can easily offset it by a corresponding reduction in the savings-GDP ratio of 3.6 percentage points, bringing the savings-GDP ratio to about 41 percent, still much higher than the West's average savings rate. In such a scenario, the impact of tariffs on China's GDP would be minimal, if any, while consumption and the quality of life in China would improve.
Moreover, the new US administration's measures have, unintentionally, become a key factor in strengthening "team China". The US administration seems to have embarked on a crusade to make enemies out of friends and friends out of countries deeply discredited before the US' Western allies. Cuts in the budget of the US Agency for International Development (USAID) might prove right those who consider American capitalism highly predatory and might cause havoc in many countries and groups of people that benefited from US aid.
The revival of the outdated 19th Century' Monroe Doctrine ("America for the Americans") and the Manifest Destiny (right of the US to expand its territory) is hurting relations with countries like Denmark, Palestine, some Arab nations, Canada and Panama, and is seen as a warning by the rest of the world. The US administration's mercantilist-protectionist trade practices and threats against US friends and foes alike, stand in the way of legally binding multilateral rules and bilateral trade treaties, which were promoted, if not imposed, for decades by the very United States itself.
The US linking of tariff threats and sanctions to the US' geopolitical rivalry with China contradicts one of the core propagandistic arguments when, for instance, the Central America, Dominican Republic Free Trade Agreement was being promoted.
More than just raising eyebrows, the US administration may have forced many people across the world to have second thoughts about the sincerity and real intentions of the administration and to wonder if it is not better to strengthen relations with a trade eager "no-strings-attached" China, away from a mercantilist end-justifies-any-means US.
Therefore, quite beyond the structural positive factors mentioned above, the US administration's announcements and decisions might have improved the prospects for the Chinese economy and its overall standing in the world.
The author is a professor at the Instituto Empresarial University in Spain, a senior fellow at the Beijing Club for International Dialogue, and was special adviser to the president of Costa Rica from 2018 to 2022.The views don't necessarily reflect those of China Daily.
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作者：秦天宝（武汉大学环境法研究所所长）2023年11月，中央全面深化改革委员会第三次会议审议通过了《关于全面推进美丽中国建设的意见》《关于加强生态环境分区管控的指导意见》等重要文件。习近平 新华社首尔2月21日电 “观览时间已结束，请有序退场。”位于韩国龙仁爱宝乐园的熊猫世界里，工作人员引导着前来参观旅韩大熊猫“福宝”一家的游客。在韩国出生的大熊猫“福宝”计划今年4月初回国。依 2月21日，湖北省仙桃市委书记孙道军，市委副书记、代市长熊享涛，会见湖北鼎龙控股股份有限公司董事长朱双全、深圳深创生物医药有限公司董事长马亚平一行，就具体项目开展洽谈。政企双方表示，要务实合作、携 四年亏掉10年利润，中国民航飞向何处 | 供给侧调查 2023年是中国民航连续亏损的第四年。 疫情三年，民航全行业累计亏损超过4000亿，2023年虽然大幅减亏，但依然没能扭亏为盈，全行业亏损288亿，其中航空公司亏损170亿 新国标实施一周年 中国婴配乳粉注册工作取得成效 中新社北京2月22日电 (记者 刘亮)记者22日从中国国家市场监管总局获悉，自婴幼儿配方食品新国标(以下称新国标)发布实施后，中国婴幼儿配方乳粉(以下称婴配乳粉)产 加强知识产权法治保障 推动发展新质生产力 国务院新闻办公室22日举行新闻发布会，介绍国家层面知识产权案件上诉审理机制运行有关情况。截至2023年12月31日，最高人民法院知识产权法庭共受理案件18924件，审结15710 。本文链接：Why Chinese economy can navigate global headwindshttp://www.sushuapos.com/show-5-47534-0.html
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