The white paper on China's position is here! A detailed explanation of the three times the United States went back on its word, and ten sentences to feel China's firm position

Image source: Photo Network

On the afternoon of May 31, the Ministry of Commerce announced that China will establish an "Unreliable Entity List" system.

Starting from June 1, China will increase tariffs on some imported goods originating from the United States.

On the afternoon of June 1, CCTV News reported that relevant state departments have decided to initiate an investigation into the issue of FedEx suspected of damaging the legitimate rights and interests of Chinese users.

In just two days, three arrows were fired at the same time, and China counterattacked and did what it said.

At 10 a.m. today (June 2), the State Council Information Office issued a white paper titled " China's Position on Sino-US Economic and Trade Consultations ". The white paper systematically sorts out and introduces the ins and outs of Sino-US economic and trade frictions and the basic situation of the two countries' economic and trade consultations, and clarifies the Chinese government's principled position on Sino-US economic and trade consultations.

Image source: China News Service (Photo by Liu Jian)

The country went back on its word three times

China has always adhered to the consultation position of equality, mutual benefit and good faith

The key information of the white paper is as follows (please click: link to read the full text ):

1. The United States has provoked economic and trade frictions with China, which has harmed the interests of both countries and the world.

The current US government pursues the "America First" policy, adopts a series of unilateral and protectionist measures, and frequently uses the "stick" of tariffs to impose its own interests on other countries. The United States has used the "201 investigation" and "232 investigation" that have been dormant for many years to frequently take action against major trading partners, disrupting the global economic and trade pattern. The United States also targeted China and launched the unilateral "301 investigation" in August 2017, ignoring China's unremitting efforts and great achievements in strengthening intellectual property protection and improving the business environment for foreign investment over the years. It made many subjective and negative comments on China, adopted economic and trade restrictive measures such as imposing tariffs and restricting investment, and provoked Sino-US economic and trade frictions.

The United States ignores the economic structure and development stage characteristics of China and the United States and the reality of international industrial division of labor, and insists that China's unfair and unequal trade policies have led to a trade deficit with China, and that the United States has "suffered losses" in bilateral economic and trade exchanges, and has taken unilateral tariff measures against China. In fact, in the era of economic globalization, the economies of China and the United States are highly integrated and together form a complete industrial chain. The economies of the two countries are closely connected and mutually beneficial. It is a wrong calculation to regard the trade deficit as a "loss". The trade restrictions taken by the United States against China are not good for China, the United States, or the world.

2. The United States went back on its word and was dishonest in the Sino-US trade consultations

Since the launch of the economic and trade consultations in February 2018, great progress has been made and the two countries have reached consensus on most of the content. However, the consultations have also experienced several twists and turns, each of which was caused by the United States' violation of consensus, inconsistency and lack of integrity.

1. The First Time of Going Back on One’s Word

In early February 2018, the US government proposed that China send a high-level delegation to the US for economic and trade consultations. China showed great sincerity and made positive efforts. It held several rounds of high-level economic and trade consultations with the US, focusing on in-depth exchanges of views on issues such as trade imbalance, and reached a preliminary consensus on expanding imports of agricultural products and energy products from the US, making important progress. However, on March 22, 2018, the US government released the so-called "301 Investigation" report on China, making false accusations against China such as "theft of intellectual property rights" and "forced technology transfer", and based on this, announced that it would impose a 25% tariff on $50 billion worth of goods imported from China.

2. The Second Inconsistency

The Chinese government, with the overall interests of bilateral relations in mind, once again sent a working group to conduct serious consultations with the United States. On May 19, 2018, China and the United States issued a joint statement, reaching a consensus that "both sides will not engage in a trade war", agreeing to continue high-level communication and actively seek solutions to economic and trade issues of concern to each other. The United States publicly stated that it would suspend the plan to impose additional tariffs on China. On May 29, 2018, the US government, despite opposition from the domestic business community and the general public, overturned the consensus of the consultations only 10 days after the two sides issued a joint statement, accusing China's economic system and trade policies, and announced that it would continue to promote the plan to impose additional tariffs.

3. The Third Time of Going Back on One’s Word

On November 1, 2018, US President Trump spoke with President Xi Jinping on the phone and proposed a meeting between the two heads of state. On December 1, the two heads of state met during the G20 Summit in Argentina and reached important consensus on bilateral economic and trade issues. They agreed to stop imposing new tariffs on each other and to step up consultations within 90 days to work towards the cancellation of all additional tariffs. In the following 90 days, the Chinese and US working teams held three rounds of high-level consultations in Beijing and Washington and reached many preliminary consensuses on the principles of the China-US economic and trade agreement. On February 25, 2019, the US announced the postponement of the original March 1 deadline for raising tariffs on $200 billion worth of Chinese goods exported to the US. From the end of March to the end of April, the working teams of the two countries held three more rounds of high-level consultations and made substantial progress. After several rounds of consultations, the two countries have reached agreement on most issues. In response to the remaining issues, the Chinese government proposed that the two sides should show mutual understanding and accommodation and jointly find ways to resolve differences.

On May 6, 2019, the United States irresponsibly accused China of "backsliding" in an attempt to shift the blame for the failure of the negotiations to China. In spite of China's firm opposition, the United States raised the tariff rate on $200 billion of Chinese goods exported to the United States from 10% to 25% from May 10, causing a serious setback to Sino-US economic and trade consultations . On May 13, the United States announced the launch of procedures to impose additional tariffs on the remaining approximately $300 billion of Chinese goods exported to the United States. The above actions are contrary to the consensus of the Chinese and American heads of state to resolve frictions through consultations, contrary to the expectations of the two countries and the people of the world, and cast a shadow on bilateral economic and trade consultations and the prospects for world economic growth. In order to defend its own interests, China has to take measures to impose additional tariffs in response.

4. China-U.S. trade negotiations have suffered a serious setback, and the U.S. government is entirely responsible

China, in order to maintain the overall interests of China-US economic and trade relations, maintains a rational and restrained attitude. According to the previous agreement between the two sides, China sent a high-level delegation to the United States for the eleventh round of economic and trade consultations from May 9 to 10, 2019, to demonstrate its utmost sincerity and responsible attitude in resolving economic and trade differences with the United States through dialogue. China and the United States had candid and constructive exchanges and agreed to work hard to manage differences and continue to advance consultations. China expressed strong opposition to the United States' unilateral imposition of tariffs, clarified its solemn position, and stated that it would have to take necessary measures to fight back. China once again stressed that economic and trade agreements must be equal and mutually beneficial, and will never make concessions on major issues of principle involving China's core interests. The premise for the two sides to reach an agreement is that the United States cancels all additional tariffs, purchases must be in line with reality, and at the same time ensure that the text of the agreement is balanced and in the common interests of both sides.

3. China has always adhered to the position of equality, mutual benefit and good faith in consultation

The Chinese government has always believed that threatening a trade war and continuously imposing tariffs will not help resolve economic and trade issues. China and the United States should uphold the spirit of mutual respect, equality and mutual benefit, act in good faith and sincerity, resolve issues through consultation, narrow differences, expand common interests, and jointly safeguard global economic stability and development.

1. Consultations should be based on mutual respect, equality and mutual benefit

2. Negotiations should be conducted in a mutually beneficial manner and based on good faith

3. China will never give in on issues of principle

4. No challenge can stop China’s progress

Image source: Xinhua Viewpoint

It is worth noting that on September 24, 2018, the State Council Information Office issued a white paper entitled " Facts and China's Position on Sino-US Economic and Trade Frictions " to clarify the facts of Sino-US economic and trade relations, expound China's policy stance on Sino-US economic and trade frictions, and promote a reasonable solution to the problem.

Image source: Xinhuanet

Last September's white paper set out China's eight major positions :

China firmly upholds national dignity and core interests;

China is determined to promote the healthy development of China-US economic and trade relations;

China firmly maintains and promotes the reform and improvement of the multilateral trading system;

China firmly protects property rights and intellectual property rights;

China firmly protects the legitimate rights and interests of foreign investors in China;

China is determined to deepen reform and expand opening up;

China is determined to promote mutually beneficial and win-win cooperation with other developed countries and developing countries;

China firmly promotes the building of a community with a shared future for mankind.

The country launches three counterattacks

US: Maintain 10% tariff on Chinese goods arriving in the US before June 15

On the afternoon of May 31, the Ministry of Commerce released a blockbuster news: China will establish an "unreliable entity list" system. The relevant person in charge of the Ministry of Commerce said in an interview with reporters that the Chinese government will comprehensively consider four factors when deciding whether to include an entity in the "unreliable entity list":

First, whether the entity has implemented blockades, supply cuts or other discriminatory measures against Chinese entities;

Second, whether the entity's behavior is based on non-commercial purposes and violates market rules and the spirit of the contract;

Third, whether the entity's actions have caused substantial damage to Chinese companies or related industries;

Fourth, whether the entity’s behavior constitutes a threat or potential threat to national security.

According to Xinhua News Agency, according to Announcement No. 3 of 2019 of the Tariff Committee of the State Council, China has increased tariff rates on some imported goods originating from the United States since June 1, 2019.

According to the announcement, the State Council Tariff Commission will impose additional tariffs of 25%, 20% and 10% on some of the goods on the list of about US$60 billion of imports originating from the United States. The additional tariff of 5% will continue to be imposed on the goods on which the tariff items were previously subject to an additional tariff of 5%.

On June 1, CCTV News reported that recently, FedEx in the United States failed to deliver express parcels according to the name and address in China, which seriously damaged the legitimate rights and interests of users and violated relevant laws and regulations of China's express delivery industry. The relevant state departments decided to initiate an investigation.

Yesterday, Ma Junsheng, director of the State Post Bureau, accepted an exclusive interview with CCTV and said: "We have recently received complaints from users that FedEx, without obtaining the user's consent or informing the user in advance, forwarded the express mail to another place without authorization and did not deliver it to the agreed address. This seriously violated the regulations of our country's express delivery industry and seriously damaged the legitimate rights and interests of users. Therefore, the relevant state departments decided to initiate an investigation."

FedEx responded through its official website: "FedEx attaches great importance to our business in China. Our relationship with Huawei Technologies Co., Ltd. and all Chinese customers is very important to us. FedEx requires itself to provide high standards of service to its customers. We will fully cooperate with any regulatory investigation into how FedEx serves its customers."

Image source: Photo Network

In addition, according to a report by CCTV News on the night of June 1, the website of the Office of the United States Trade Representative announced that Chinese goods exported from China before May 10 and arriving at U.S. ports before June 15 will maintain a 10% tariff rate. The previously notified deadline was to arrive at the port before June 1.

17 months to go,

US stock market loses $5 trillion

It is worth noting that on May 30, Trump wielded the tariff stick at Mexico: "Starting June 10, the United States will impose a 5% tariff on all goods imported from Mexico into the United States until illegal immigration through Mexico into our country stops." The White House subsequently issued a statement saying that by October 1, the tax rate will be raised to 25% and maintained at this level.

At the same time, on May 31, Trump signed an executive order to remove India from the list of countries that receive the GSP treatment. The executive order will take effect on June 5.

How much damage has the multi-front trade war launched by US President Trump caused to the US stock market?

According to a report by Global Network citing CNBC, Deutsche Bank has calculated that the US stock market has lost $5 trillion in the past 17 months. Binky Chadha, chief strategist at Deutsche Bank, said that this loss is comparable to the economic shock caused by the European financial crisis in 2011-2012 and the plunge in crude oil prices in 2014-2016.

In May alone, the market value of U.S. stocks evaporated by more than $3 trillion, equivalent to the loss of the size of "the United Kingdom" (according to World Bank data, the UK's GDP last year was less than $3 trillion).

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