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Trade war a bluff in the game of a paper tiger

China Daily | Updated: 2017-01-20 07:23

Trade war a bluff in the game of a paper tiger

US President-elect Donald Trump speaks during a news conference in the lobby of Trump Tower in Manhattan, New York City, US, January 11, 2017. [Photo/Agencies]

Some hawkish members of the Donald Trump team have repeatedly adopted war-like rhetoric about the incoming administration's trade relations with China and other developing countries. They seem to want to send the message that other countries need the United States more than the other way round.

But like many presumptuous war mongers in the past, they may not see the whole picture or understand history.

The trade war warriors' first miscalculation is not recognizing that the world is now vastly different from the 1980s, when Ronald Reagan, their role model, was US president.

Since then, according to the World Bank, the global total of merchandise exports has climbed more than eight times to almost $16.5 trillion in 2015.

Of this amount, the United States accounts for a little more than 9 percent. So its ability to mobilize enough war efforts against the largest exporter, which accounts for 13.8 percent, cannot but be limited.

Second, according to the World Trade Organization, although China is dependent on the US for 18 percent of its total exports, larger than the US is on China (7.7 percent), China's global reach is more extensive.

Third, as a result of its economic transition that has been underway over the past few years, China is increasingly less dependent on the making of small daily commodities. It has grown to be a versatile manufacturer and, empowered by up to 7 million college graduates every year, is now producing some of the best machinery in the world.

More recently, China has also grown into a worldwide investor, and most importantly in large infrastructure projects and technologies.

Last but not the least, the new administration has promised that the US economy will create 25 million more jobs. Can Trump's trade war lieutenants say what these new workers will produce and, more pertinently, to whom these products will be sold?

If the US is going to produce more, it will have to sell more, and it will have to sell more to the rest of the world. And one of the world's largest, and most rapidly growing group, of consumers will be in developing countries such as China.

So trying to shut out China is unwise, because it is equivalent to shutting out some of the best opportunities that free trade can generate for an economy. All the trade war threat to China is just the bluffing of a paper tiger.

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