AnalysisAccording to the latest economic and trade data recently reported by the media regarding China’s trade with its major trade partners, the economic connectivity between China and other major economic entities over the past two consecutive years has generally showed a sign of being further strengthened.
China’s trade volumes in 2022 with some of its core trading partners including the Association of Southeast Asian Nations (ASEAN), the European Union (EU), the United States, the member countries of the Regional Comprehensive Economic Partnership (RCEP), and the nations participating in the building of the Belt & Road Initiative respectively surged by 15%, 5.6%, 3.7%, 7.5%, and 19.4%.1
ASEAN still remained as China’s largest trade partner in 2022. The two-way trade between China and ASEAN amounted to $970 billion.2 The EU and the U.S. listed on the second and third place respectively. China-U.S. trade reached $755.6 billion in 2021,3 and further rose to $760 billion in 2022.4
The above performances in trade were made against the context that a series of disruptive factors have exerted huge pressure on the overall picture of the global economy, consisting of the repercussions of the COVID-19 pandemic over the past three years, the growing tension of China-U.S. bilateral relations driven by the frictions between the two countries related to trade, technology, Taiwan issue and so on, as well as the escalation of the political and security environment in Europe led by the ongoing Russia-Ukraine conflict.
Under these complex circumstances at both regional and global levels in the political, economic, and security spheres, the major regional and global economies have managed to achieve an overall positive growth in trade. This, from a certain sense, can be a good signal to the world.
Though inflation might have played a role in resulting in the rise of trade figures among various economies. Yet, the trade performances made by the major economic entities could also have reflected that the regional and global production and supply chains haven’t been seriously affected by the range of disruptive factors just mentioned above. We may assume that regional integration particularly in Asia and globalization have been sustained and further deepened.
The previously alleged decoupling of the two major economies - the U.S. and China - as many have worried, hasn’t so far really happened yet, even though the U.S. has subsequently taken a series of restrictive measures related to trade, technology, and intellectual property rights in recent years against China, aiming to re-structure the production and supply chains, and to keep the U.S. competitive edge in a number of important areas such as advanced science and technologies.
According to the U.S.-China Business Council, due to the additional tariffs imposed on certain Chinese products by the U.S., the average American household needs to pay extra more than $400 tariffs per year for the items imported from China.5
Besides the ordinary American consumers, the U.S. business community meanwhile has seemed to be more concerned about the possible impacts of certain measures taken by both the U.S. and Chinese governments in recent years. According to the Fortune, new investments especially the fixed-capital flows from the U.S. to China may have slowed down, partly due to the investors’ fear of the possible repercussions of the geopolitical tension.6
Given the above figures in regional and international trade as well as the concerns raised by the U.S. consumers and business people, there should be a need for the key decision-makers in Washington to re-assess the function and usefulness of the U.S. trade measures and other type of sanctions against China.
China and the U.S., in a long run, could explore more alternative means to help re-enforce the interests of each other in the areas related to trade, supply chains, more advanced technologies, intellectual property rights, energy efficiency, and climate change etc. Such kind of efforts to be made by the decision-makers of both countries over these issues are believed to be able to better adapt to the real needs of the business communities of the two countries, and also to better meet the interests of a large number of consumers.
More broadly, as the major economic powers in the world, China and the U.S. have been taken as significant stabilizing forces of the global economy. Therefore, the proper management of economic and trade frictions between the two countries could, from a certain degree, help restore the confidence of the world to the overall global economic performance in the post-pandemic era.
Source:
1. https://www.china.org.cn/business/2023-01/13/content_85057951.htm
3. https://www.globaltimes.cn/page/202201/1245953.shtml
5. https://www.globaltimes.cn/page/202201/1245953.shtml
