Ambassador Gui Congyou Holds a Press Briefing on the Trade War Started by the US Against China

On 23 May, Ambassador Gui Congyou held a press briefing with Svenska Dagbladet, Dagens Nyheter, Dagens industry and Sveriges Radio, presenting the positions of the Chinese side on the trade war started by the US against China. The full text is as follows.

Ambassador Gui said, I know the Swedish side is closely following the trade war started by the US against China, and I would like to present the positions of the Chinese side on the matter.

Ambassador Gui said, first, I wish to state that whether it is a hot war, a cold war, a trade war, a technology war or whatever kind of war, the Chinese side firmly opposes them all. An observation of the over 5000 years of history of the Chinese nation tells us that it is not in our tradition or DNA to wage war against other countries. “Peace and harmony” is the essence of Confucianism of the Chinese nation. A culture that advocates harmony is in the core values of the Chinese nation, and it is also the philosophy for development followed by the Chinese nation. When it comes to trade, the idea that harmony and peace brings wealth is the way we approach business. It means one can make a fortune through treating others kindly and peacefully. There is another Chinese saying that goes, “A harmonious family will prosper”, which carries the same idea. Our approach to foreign relations is to widely forge cordial relations and conduct friendly exchanges and mutually beneficial cooperation with all other countries and parties so as to develop and make progress together. As President Xi Jinping said, building a community with a shared future for human kind based on shared interests is to deliver benefits to all countries through win-win cooperation, which is a sharp contrast to the economic bullying and selfish philosophy of “America first” of the US.

Ambassador Gui said, facing foreign invasions and wars imposed by foreign powers, the Chinese nation never feared, retreated or caved. Instead, we rose up and fought back. There is no shortage of such examples in China’s history. Our resistance against the barbaric aggressions, occupation, division and enslavement of Western powers since modern times, especially the 14 years of the War of Resistance against Japan, is ample proof of that. The US side bears full responsibility on the China-US trade war, as it is unilaterally started by the US. Since the US started the trade war with China at the beginning of last year, the Chinese side has been sincerely negotiating with the US out of our commitment to peace and harmony. After more than one year of negotiation, important progress has been made, but then the US went back on its words, and insisted on unilaterally raising tariffs on USD 200 billion worth of Chinese products to 25%. Even after this, the delegation of the Chinese Government still went to the US as planned, hoping to continue constructive and friendly negotiation with the US, which fully demonstrated our sincerity for reaching a deal.

The US side claims that it has a huge trade deficit with China. However, this is a non-issue. The US used one-sided statistical methods, neglecting trade in services, the replacement of trade with transnational investment and restrictions on high-tech product exportation to China. Taking these factors into consideration, the US deficit with China actually has been decreasing year by year. In 2017, it was only USD 45.3 billion. As for the “deficit” described by the US, it is determined by the structures of our two economies. The economic structures of the two countries determining the structure of their trade is also a natural part of fair trade. However, the US, in complete disregard of the basic fact of our economic structural complementarity, deliberately uses its government powers and pressures China to use government powers to change our trade structure to force a reduction of China’s surplus. Such a course of action goes against WTO rules and violates market economics. Taking China-Sweden trade as an example, when China had a surplus in trade in goods, Sweden did not raise any objection. In the last couple of years, it was Sweden that had a surplus in trade in goods, and China did not complain either. In fact, if our trade in services is counted, Sweden has started to have a trade surplus much earlier, and the surplus has been much bigger. Moreover, China welcomes more imports from Sweden and bigger surplus of Sweden, because such a surplus is consistent with our need to pursue high quality economic development, and deliver high quality products and a good life to the Chinese people. This is what following market economics and rules of free trade is all about.

The concerns of the US over the surplus can well be addressed through friendly consultations and constructive cooperation. China’s economy is growing rapidly, and is now the second largest in the world. The Chinese side is also willing to accommodate such concerns based on our need to deepen reform and further open up, share more dividends of our reform and opening up with the US, and gradually reduce the trade surplus while meeting the demand of US consumers for good quality yet inexpensive Chinese products. However, if the US asks the Chinese Government to take administrative measures to forcefully reduce the surplus in a given timeframe, it is simply not something China is able to do. If the Chinese Government caved in to the US demand and used administrative measures to force Chinese buyers to buy more from the US on a large scale, it undoubtedly would hurt the interests of other trading partners of China in the Chinese market, including Sweden. It would restrict or even artificially hinder the efforts of other trading partners of China to expand their share in the Chinese market. It is not something that China is able to do either.

Ambassador Gui stressed that the trade war started by the US hurts other countries and itself. The trade war deliberately started by the US damages the US economy, and the US will not win from it. Of course the necessary counter-measures by China will also affect the economy of China. The global economy will suffer from the trade war too. These consequences are the last thing we want to see. Our door is open for trade negotiation with the US. If the US wants to talk, let’s talk, but all talks must be based on equality, trust and mutual benefits. If the US sticks to its gun, we have no choice but to fight it till the end. In fact, the US is ill. It needs to see a doctor to treat the illness, instead of blaming others and shifting the trouble to others.

China has nearly 1.4 billion people, with per capita GDP close to USD 10,000. The Chinese economy has enough resilience and the Chinese Government has enough policy tools to ensure that our economy will continue to grow steadily and healthily amid a trade war. The almost 1.4 billion Chinese people pursue a high quality life. Consumption now contributes up to 76% to China’s economic growth, and China is becoming the world’s largest consumption market. We are confident and are capable of maintaining a positive and steady economic growth momentum through continuing to expand domestic demand, and make due contribution to global economic growth. We will continue to be committed to reform and opening up. We will continue to deepen reform and open up wider. We are ready to open up further to all other countries including Sweden. We welcome more trade with Sweden and greater investment from Sweden. Let us expand our cooperation for mutual benefits, and shared development and prosperity.