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.
If you have a specific expertise, or would like to share your thought about our stories, then send us your writings at opinion@chinadaily.com.cn, and comment@chinadaily.com.cn.
If you have any problems with this article, please contact us at app@chinadaily.com.cn and we'll immediately get back to you.
2024春节档：史上最火，史上最“卷” 羊城晚报记者 李丽 据国家电影局统计数据，2024年春节档总票房80.16亿元，在观影人次、场次和票房3个维度创造影史最高纪录。 过去10年间，看电影逐渐成为中国人过年的新民俗 春节假期北京接待游客1749.5万人次 旅游市场热度攀升 中新网北京2月18日电 (记者 徐婧)记者17日从北京市文化和旅游局获悉，春节假期(2月10日至17日)，北京接待游客1749.5万人次，按可比口径同比增长37.4%，比2019年同 2月21日，司法部、国家发展改革委、全国人大常委会法工委共同组织召开民营经济促进法立法座谈会，听取民营企业代表和专家学者对立法的意见建议。会议强调，要坚持以习近平新时代中国特色社会主义思想为 新华社记者周楠、余春生、谢奔“路上快要结冰了，开车要注意安全。”2月21日中午，在省道S306茶垭段，寒风瑟瑟，湖南省桑植县竹叶坪乡政府工作人员李雅敏正和同事对过往车辆进行警示提醒。气象部门分析，受强 中新经纬2月22日电 据高检网22日消息，近日，中国铁路青藏集团有限公司原党委委员、职工董事、副总经理、工会主席贾军(副厅级)涉嫌受贿罪、行贿罪一案，经最高人民检察院指定管辖，由甘肃省庆阳市人民检察院依法向甘肃省 。本文链接：Why Chinese economy can navigate global headwindshttp://www.sushuapos.com/show-5-47534-0.html
声明：本网站为非营利性网站，本网页内容由互联网博主自发贡献，不代表本站观点，本站不承担任何法律责任。天上不会到馅饼，请大家谨防诈骗！若有侵权等问题请及时与本网联系，我们将在第一时间删除处理。
上一篇： China's skilled workers impress on world stage
下一篇： 前瞻｜开放中国充满机遇 跨越山海普惠共赢