China confident of tackling protracted trade tensions

BEIJING - For every countermeasure China has been forced to take in the lingering trade tension with the United States, its motivation is not to harm but to awaken some US policymakers to a simple fact: the inextricable interconnection of the Chinese and American economies.

Put it more bluntly, underestimating the interdependence of the two economies is very risky. Any political attempt to suppress or obstruct the Chinese economy will backfire on the US economy and harm American business and consumers.

Alarming signals for a possible recession of the US economy are looming large in the bond market with the yields of short-term bonds staying above those of long-term bonds.

As the previous recessions have been preceded by an inversion on the 2-year and 10-year Treasury securities, many American analysts expect a sharp slowdown ahead, while rattled businesses are holding off their investments.

If the US administration persists in escalating the tariff tension with new higher tariffs and sees no necessity to scrap all additional tariffs, it at least makes one thing clear - hawkish US policymakers do not think the US economy is hurt enough.

The repercussions would be much more profound in that case. To make an example, this year's Christmas shopping might not be as exhilarating as before, given a large portion of the $300 billion worth of Chinese products subject to higher US tariffs are consumer goods.

American households might have to budget carefully or even spend less for fear of a worsening economy. Businesses, on the other hand, might see their profits eroded by more expensive imports and less robust sales from a growing legion of thrifty consumers. Low-income American families would be hit most by rising living expenses.

To get the US policymakers back on the right track for healthy bilateral economic and trade ties, China has exercised a great deal of restraint and patience.

All of the countermeasures China has been forced to take are defensive, well-measured and out of the need to safeguard its people's rights to develop and the world's multilateral trading system.

Some US politicians have been obsessed with scapegoating China for their domestic economic problems, depicting China as a rival of the United States and failing to reflect upon their poor decisions.

Reviewing how the US-provoked tariff tension have been going for more than a year, one would realize China has sufficient means to fight back and chooses to act in a way that is refrained and responsible to both the Chinese, the Americans and the world at large.

Facing external disruptions from the United States, China never overacts to worsen the situations but dedicates itself to implementing established policies with composure, expanding opening-up, advancing reform, optimizing the business environment and diversifying the overseas market, with a good intention to pursue inclusive growth and shared prosperity with other countries.

As the tariff tension lingers, many more Chinese and Chinese firms gather up greater strength and confidence, not just because of a patriotic passion but a rational judgment that a trade friction can be a blessing in disguise.

Truly there is nothing to fear. For everything that needs to be done for national rejuvenation, there is a reason for the Chinese to do them better under current circumstances, from technical innovations, industrial upgrades, establishment of globally competitive supply chains, better education and healthcare, less poverty, more investor-friendly business environment, more efficient resource allocation, wider opening-up, broader reform to improving the welfare of the people.

Such confidence is well justified, as economic indicators reveal the stamina of the Chinese economy. China's trade structure, for instance, keeps optimizing, with the foreign trade volume reaching 14.67 trillion yuan ($2.14 trillion) in the first half of 2019, up 3.9 percent year-on-year.

Foreign direct investment into the Chinese mainland expanded 7.3 percent year-on-year to 533.14 billion yuan in the Jan-July period. Later this month, the MSCI will raise the inclusion factor of all large-cap China A-shares in the MSCI indexes from the current 10 percent to 15 percent.

Playing the old tricks of bullying and maximum pressure, the US administration has escalated the trade tensions repeatedly and tried to coerce China into accepting its irrational demands.

China did not and will not surrender. History will credit those who befriend China and show respect to the Chinese people who have been taking pains and hardships to eliminate poverty and pursue shared prosperity with the rest of the world in a tough time.