How economic ties are handled is crucial: experts

Experts hope China and the United States better manage their economic relationship that is increasingly characterized by cooperation and competition.

US President Donald Trump on Monday highlighted the challenges and growing competition from powers China and Russia.

"We also face rival powers, Russia and China, that seek to challenge American influence, values and wealth. We will attempt to build a great partnership with those and other countries, but in a manner that always protects our national interest," he said in his first national security strategy speech since taking office.

The US president claimed that "whether we like it or not, we are engaged in a new era of competition", listing also a number of other competitions.

The national security strategy said the US will counter all unfair trade practices that distort markets using all appropriate means, from dialogue to enforcement tools.

A senior administration official said in a background briefing on Monday that the US likes to see more reciprocity with China across the board.

"So we don't define the specific elements of the US-China relationship, because again that's a broader strategy, but I think we provide a general outline of a direction," the official said.

Stephen Hadley, a former national security advisor under President George W. Bush, said the relationship with China is going to be characterized with both collaboration and competition at the same time.

"I think both sides have an incentive to manage this cooperative and competition relationship in such a way that it does not become confrontation or conflict. I think the relationship between the two leaders is off to a good start in that respect," Hadley said in response to a China Daily question at a conference call after Trump's speech.

Hadley described the Chinese and US economies as "very interdependent. Our prosperity is dependent on each other's prosperity. We have not had a Cold War relationship with China."

David Dollar, a senior fellow at the Brookings Institution and a former World Bank country director for China, said Trump's national security strategy sees China as a competitor that is trying to erode American prosperity, and it concludes that the policy of engagement with China has been a failure.

"The strategy does not contain specific measures, so it remains to be seen if Trump is going to impose trade protection aimed at China, but the tone of the document makes it likely that the administration will go that route," Dollar said.

In the past few months, China has protested the US initiation of a Section 301 investigation into China's policy and practice on intellectual property and the self-initiation of anti-dumping and countervailing duties on Chinese aluminum sheets, creating concerns about a tit-for-tat escalation.

Wayne Morrison, a specialist in Asian trade and finance at the Congressional Research Service, believes both countries are regarding each other as economic competitors.

"China is becoming more developed, and thus, the economic relationship is becoming more complicated," he said.

Morrison expressed that China's efforts to boost innovation and high technology are prudent if it is to avoid hitting the "middle-income trap. However, if Chinese economic policies involve greater use of industrial policies and restrictions placed on foreign firms, we can expect the trade relationship to become more strained," he said.

"That is why I believe we are in a critical junction in our economic relationship. Major issues need to be worked out now rather than later."

"Healthy competition between the United States and China may yet prove to be a welcome development and is much preferred to misguided talk of containment," said Colin Grabow, a policy analyst at the Cato Institute.

Brendan Bechtel, chairman and CEO of Bechtel, the largest construction and civil engineering company in the US, said there are situations in which Bechtel competes head-to-head with Chinese firms.

"Sometimes we win, sometimes we lose. That's usually going to be driven by what the end customer wants in the value proposition," he said on Monday.

chenweihua@chinadailyusa.com