China says it can close trade deficit with U.S. by buying four Ford-class CVNs

People’s Daily, official newspaper of the Chinese Communist Party, has mocked the United States with a proposal to close the trade deceit between both countries by buying four Ford-class nuclear-powered aircraft carriers.

"If the US sold four Ford-class aircraft carriers priced at $15 billion each, it would easily make up for a $ 60 billion trade deficit with China,” said in an op-ed written by Zhong Xuanli. A pseudonym used by the Central Propaganda Department’s Theory Bureau.

 OriGinaL News PubLicaTion :-

The US is wrong to claim that it is “at a disadvantage” and “economically invaded” in doing business with China just because it has a huge trade deficit. 

The US-China trade relations are mutually voluntary and complementary. China has never looked for a forced trade relationship with the US, or a trade surplus.

Statistics by the United Nations (UN) indicated that in 2017 US exports of goods to China amounted to $129.89 billion, a 577% increase from $19.18 billion in 2001, much higher than the average growth rate of overall US exports that stood at 112 percent in the same period.

It is noteworthy that the growth was achieved as the US has strictly restricted the categories of exports to China and banned the sales of certain high technologies.

The US trade deficit with China would probably be narrowed if the US allowed sales of high-tech products to China. If the US sold four Ford-class aircraft carriers priced at $15 billion each, it would easily make up for a $ 60 billion trade deficit with China.

A report released by the Carnegie Endowment for International Peace in April 2017 indicated that if the US were to liberalize its export barriers against China to the same level as those applicable to Brazil or France, the US trade deficit with China would be narrowed by up to 24 percent and 35 percent respectively.

While keeping product design and marketing on its own territory, the US has been moving its processing and assembly lines overseas in recent decades, with China being the largest host country of this global industrial transfer.

A large number of Chinese exports to the US are actually US-designed products manufactured in China. Chinese companies get paid by product manufacturing and they earn much less than the transnational companies. It is totally unfair to say China has gained more profits than the US.

Instead of being an “economic aggression”, China’s development provides great power for global economic growth. China has kept a contribution of about 30 percent to global economic growth since 2013, the first place in the world. In 2017, that figure reached 34.6 percent, almost twice of that of the US.

China’s development has also expanded the global market. From 2001 to 2017, the growth of goods imported by China rose by 13.5 percent on average, twice as fast as the global average. In the same period, the average growth of services in trade imported by China was 16.7 percent, 2.7 times of the global average.

China is also an important job creator. It has co-built more than 80 economic and trade cooperation zones with Belt and Road countries, creating 244,000 local jobs. According to Ernst & Young, China has created more than 130,000 jobs in Africa from 2005 to 2016, tripling that done by the US.

Between 1990 and 2016, China created 1.8 million jobs across Latin America and the Caribbean region, according to an International Labour Organization report titled "Effects of China on the quantity and quality of jobs in Latin America and the Caribbean".

Some people in the US claime that China is “stealing” American jobs, because some US factories have been moved to China. Indeed, the remarks arebiased and groundless.

According to a 2017 US-China Business Council estimate, in 2015, US exports to China and US-China two-way investment supported 2.6 million jobs in America.

A study by Ball State University found that America has lost more than 7 million factory jobs since manufacturing employment peaked in 1979, but the vast majority of the lost jobs — 88 percent — were taken by robots and other homegrown factors that reduce factories’ need for human labor. It proves that the American job loss has no connection with China.

When expanding opening up, China has never taken the initiative to start a trade friction. Instead, it has comprehensively fulfilled its commitments to the World Trade Organization (WTO).

China has increased assistance to developing countries, especially to the least-developed ones, in an effort to narrow the South-North development gap. By March 2018, it had accorded zero tariff treatment on 97 percent of all tariff lines to 36 least-developed countries that have diplomatic relations with China and completed exchange of notes.

In 2018, China announced measures for further opening up and substantively lowered threshold for market access. It pledged to speed up in-depth and all-round opening up of the service sector, especially financial industry.

Under the banner of “reciprocal opening up” and excuse of abusing the “national security”, the US has established the Committee on Foreign Investment in the United States (CFIUS), which includes members of various departments, such as the intelligence department. The concept of “national security” is constantly expanded to become a tool to block foreign companies to enter the US.

In 2017, the CFIUS restricted more than 20 foreign companies, half of which were Chinese, from entering the US by the excuse of “national security”.

As WTO members, China and the US should solve economic and trade disputes under WTO framework. However, the US has ignored WTO dispute settlement mechanisms and arbitrarily handled foreign trade frictions by its domestic laws.

Its behaviors run totally against the basic principles of the WTO, as well as its obligations of tariff reduction and the most-favored-nation treatment.