Home > Bilateral Relations
Ambassador WU Xi Gives an Exclusive Interview on China-US Trade and Related Questions

On September 12th, Ambassador Wu Xi gives an exclusive interview with BusinessDesk on China-US trade and related questions. Here is the full text:

1. Does the trade war with the US make the upgrade of the China-NZ FTA any easier to achieve? Does it make Beijing more interested in concluding new trade arrangements that demonstrate commitment to a rules-based international trading system? Has the NZ government expressed any support for China as the trade war with the US has developed? Should it? What is China’s expectation of its FTA trading partners in this dispute?

The first bilateral Free Trade Agreement China signed with developed countries was with New Zealand. The China-New Zealand FTA has significantly benefited both countries. Since the signing of the FTA in 2008, the bilateral trade volume has increased threefold and maintained steady and rapid growth, expanding significantly in sectors ranging from dairy exports and tourism to scientific research and innovation.

The two sides have agreed to speed up negotiations on the upgrade of our bilateral Free Trade Agreement and have already carried out eight rounds of negotiations which focus on E-commerce and service industry exports. The upgraded FTA has the potential to release even more benefits to the business community. We hope the two negotiating teams will step up their efforts and reach consensus at an early date.

New Zealand has been a strong advocate for and supporter of global free trade. Both China and New Zealand have benefitted from the current international trading system. China has been committed to promoting the liberalization and facilitation of global trade and investment, as well as to safeguarding global free trade and the multilateral trading system. To this end, we actively participate in multilateral trade negotiations such as RCEP, and promoting regional economic integration.

The trade war initiated by the US violates the rules of the WTO and seriously undermines the multilateral trade system and the normal international economic and trade order. It threatens the global industrial and supply chain, and poses risk to world economic growth. The US will eventually suffer from its own actions.

As we have noticed, there has been a lot of concern about the negative impact of the trade war on New Zealand economy. All countries, including New Zealand need to stand up for the strength and integrity of multilateral institutions, oppose trade bullying and safeguard the rules-based multilateral trading system with the WTO at its core. We all need to work for an international economic and trade regime that is more open, balanced and inclusive.

2. Does the Chinese government accept any of the criticisms levelled at it by US politicians – both Republican and Democrat – that China’s regard for intellectual property rights is not sufficiently protected and that Chinese firms have benefited from theft of other countries’ and companies’ IP?

The US allegations are groundless and are just excuses to justify its trade war. Over the past 40 years since reform and opening up, China has made notable achievements in technology innovation and IP protection. China is now ranked No.2 in the world in R&D investment and citations of scientific papers and applications of international patent. China is ranked 3rd in the world in applications for international trademarks. In 2018, China’s payments for foreign intellectual property reached 35.6 billion US dollars. More than a quarter of it went to the US.

China has also established a comprehensive legal system for the protection of IP that is consistent with international rules. At the end of 2014, three IP courts were set up in Beijing, Shanghai and Guangzhou. Since 2017, the Supreme People’s Court has approved the establishment of IP tribunals by intermediate people’s courts in Nanjing and 18 other cities. In 2018 alone, Chinese courts received 301,278 new IP cases, of which 287,795 were concluded. As far as international IP cases are concerned, China has one of the shortest adjudication periods in the world.

The work of China’s intellectual property protection has won broad international recognition. Former World Intellectual Property Organization (WIPO) Director General Arpad Bogsch noted that China’s achievements are “unmatched in the history of IP protection”. The US Chamber of Commerce recognized that China is making concrete progress in creating an IP environment appropriate to the 21st century. Many of the concerns raised by foreign firms doing business in China have already been addressed through judicial reform and a strengthened enforcement mechanism.

3. What is the ambassador’s view of how this trade war will be resolved?

Since the launch of the China-US economic and trade consultations in February 2018, China and the United States have made considerable progress addressing each other’s trade concerns, through 12 rounds of trade talks and negotiations. Despite this momentum, the US has now flip-flopped, repeatedly broken its promises, imposing additional tariffs on Chinese exports and escalated a trade war.

China does not want a trade war, but we are not afraid of fighting one. We are not looking for any further escalation of the trade war and we are always willing to negotiate on the basis of equality and mutual respect. However at the same time, we’ll take resolute measures to safeguard our own interests. The only solution is to find a mutually beneficial, win-win agreement which serves the interests of China and the US and meets the expectations of the world. We hope the US will work with us towards the same goal.

On September 5th, Chinese and U.S. chief trade negotiators agreed to jointly take concrete actions to create favorable conditions for bilateral consultation. In a phone conversation, the two sides agreed to hold the 13th round of China-U.S. high-level economic and trade consultations in early October in Washington.

4. Can the Chinese economy afford the slowdown that the trade war is creating?

Can the world economy afford the slowdown that the trade war is creating? The IMF predicts that the intensifying trade friction could cut global GDP by 0.5 per cent in 2020. Analysts at Morgan Stanley said that if the US imposes 25% tariffs on Chinese imports, world economic growth would downgrade to 2.5% or lower.

Can the US economy afford the slowdown that the trade war is creating? According to the recent Reuters poll of economists, the probability of a US recession in the next two years has risen to 45%. A study from the US Chamber of Commerce finds that the trade war will cost US GDP 64 billion to 91 billion US dollars every year from 2019 to 2023.

Can the Chinese economy afford the slowdown that the trade war is creating? The answer is very clear. China remains committed to its own cause no matter how the external environment changes. We will continue to deepen reforms and further open up our economy to the outside world. China's huge domestic market will continue to open to the world and bring more opportunities to countries around the world.

The combination of the enormous demand from our domestic market and ongoing supply-side structural reform in our economy will continue to enhance the competitiveness of Chinese products and companies. China has sufficient room for fiscal and monetary policy maneuvers. Despite the trade war, China has the conditions to maintain the momentum of sustainable economic development. As President Xi Jinping pointed out, the Chinese economy is not a pond, but an ocean. After enduring numerous winds and storms, a pond may be irreversibly damaged, but the ocean will still be there.

5. Does the US-China trade dispute create any opportunities for NZ and China to work more closely together?

During the Prime Minister Ardern's successful visit in April, the two leaders agreed to strengthen the China-New Zealand Comprehensive Strategic Partnership, speed up negotiations to upgrade the bilateral Free Trade Agreement, providing a better operating environment for each other's companies, and deepen cooperation under the Belt and Road Initiative. We also signed four new agreements to cooperate on taxation, agriculture, finance and scientific research, and issued a statement between leaders of China and New Zealand on climate change.

China and New Zealand have comparative advantages that complement each other. New Zealand is a leader in clean and renewable energy, an area of great interest to China. New Zealand also has strong capability in science research and innovation, and real scope exists for China to collaborate with New Zealand in these fields.

6. Does the China-US trade tension make it more important that NZ accept the use of Huawei componentry in its 5G network, or are the two issues unrelated?

The US has, in the absence of evidence, continuously abused the national security concept to disadvantage Chinese companies including Huawei. Such an act is disgraceful and immoral, and it runs counter to the principle of market economy, for which the US has been a self-claimed champion. The US not only lectures other countries on their 5G networks, but also pushes them to take the same stance, which is a blatant demonstration of unilateralism and hegemony.

5G technology is an important innovation for all members of the international community. Its development and application is important to global growth, the interests of all countries and the progress of human civilization.

Huawei has had good co-operation with NZ telecommunication companies, and has offered quality services at a competitive price. Huawei observes the laws and regulations of New Zealand as well as international rules. There is no evidence to prove Huawei poses a threat to New Zealand. We hope that New Zealand will provide a fair, just and transparent business environment for all companies, including Huawei.

Suggest to a Friend: