Morgunblaðið Publishes A Signed Article by Ambassador Jin Zhijian Entitled Trade War is a Dead End, Cooperation is the Only Way Out

On June 18 2019, the famous Icelandic newspaper Morgunblaðið published a signed article by Ambassador Jin Zhijian entitled Trade War is a Dead End, Cooperation is the Only Way Out. In the article, Ambassador Jin gave an overview of the trade talks between China and the United States, refuted unwarranted accusations by the US and made clarifications on the facts, and stated China’s positions.

The full text is as follows:

Recently the trade frictions between China and the US have gained global attention. The economic relationship between the world's two largest economies will not only affect the interests of the two countries but also have an important impact on the world economy. In this article, I would like to brief our readers with the development of China-US trade talks, clarify the facts and state China's positions.

The China-US trade dispute was unilaterally provoked by the US. Since April 2018, the US has raised tariffs on Chinese products exported to the United States several times. In order to avoid the escalation of the situation, China actively engaged in 11 rounds of China-US trade talks with sincerity and goodwill, committed to resolving differences through dialogue, and strived for a mutually beneficial agreement. With joint efforts, both sides have made positive progress on a series of specific issues. Yet in disregard of China’s sincerity, the US side has resorted to maximum pressure, making unreasonable demands. On May 10, 2019, the US raised tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent, which destroyed the basis of the negotiation. This kind of bullying practice not only harmed the interests of the Chinese and American peoples, but also posed a serious challenge to the steady development of global economy, causing widespread concern in the international community.

Recently the US lodged the argument that the United States suffered losses in bilateral trade with China, make allegations against China on so called theft of intellectual property, and accused that China's technology posing threat to the world. But what is the true story?

The huge US trade deficit with China is an inevitable result of the structural problems of the US economy, and it is also determined by the comparative advantages of the two countries and the international division of labor. Excessive consumption, insufficient savings, and huge fiscal deficits are the root causes of the US trade deficit. In the past 40 years, the trade volume between China and the United States has increased by more than 230 times. The annual sales of US-funded enterprises in China reached 700 billion US dollars with profits of more than 50 billion US dollars.

The Chinese government attached great importance to protecting intellectual property rights and already put in place a full-fledged legal system. China strictly acts in accordance with the law, and there is no policy of forcing foreign companies to transfer technology. It is the hard work and wisdom of the Chinese People that makes fast technology development in China. The US abused the concept of “national security” to crack down Chinese companies such as Huawei in attempt to suppress its development and hinder China's technological progress. This violation of WTO principles has caused widespread doubts and dissatisfaction.

Raising tariffs won't solve any problem, and starting a trade war will harm not only others, but also oneself. The countermeasures China has taken are entirely self-defense against the trade war started by the US. By doing so, we are not only defending our own legitimate rights and interests, but also safeguarding multilateralism and the free trade system. China does not want a trade war, is unwilling to fight, but is not afraid to fight. China has never succumbed and will never succumb to external pressure and swallow the bitter fruit that undermines its development interests. China keeps the door open for negotiations and there is no change of our position to address differences through dialogue and consultation. However, the two sides should follow the principles of mutual respect and equality for a equal-footed and mutually beneficial agreement. It is hoped that the US will recognize that the global free trade system cannot be shaken. Dialogue is the best way to resolve international disputes. Cooperation is the only right choice to resolve trade frictions. China hopes that the US will work with China, meet each other halfway, and strive for a mutually beneficial agreement.

China speaks highly of Iceland's position of safeguarding the multilateral free trade system. Iceland is the first European country to sign a free trade agreement with China. Since signed six years ago, the free trade agreement between China and Iceland has brought tangible benefits to our peoples. The trade volume between the two countries has exceeded 700 million US dollars last year. China adheres to free trade principle and continuously expands its opening up to the outside world. China is willing to work closely with Iceland and the rest of the world to achieve win-win cooperation and mutual benefits, and contribute to the development of global trade and economy.

Jin Zhijian                

Chinese Ambassador to Iceland