Zhang Yuyan: A Good Time to Act

Jan 27 , 2021

Zhang Yuyan, Director of Institute of World Economics and Politics, Chinese Academy of Social Sciences; Chief Expert of National Institute for Global Strategy, CASS.


Today we gather here to talk about the China-U.S. relationship and trade and economic ties between the two countries. To begin with, I think it’s important to take a look at some facts.

First, the Trump administration engaged in a trade war with China in the past few years, and the many measures taken now prove to be ineffective. In fact, this is a lose-lose game. In today’s world, a trade war leads to only a dead end.

Second, the world is experiencing tremendous changes today. In addition to the impact of the pandemic on the world economy, there are many other urgent issues, such as climate change and species extinction, that require our cooperation.

In addition, there is strong mutual distrust between some of the world’s major countries, such as between the United States and China. Many Americans see China as a threat to their country, while many Chinese believe that the United States is doing everything possible to contain China’s development. As a result, lack of understanding and strategic trust is a big problem we face today.

From an economic point of view, the world today is in urgent need of trade and investment cooperation, but such cooperation is in short supply. This is an important reason why we are here today to discuss China-U.S. relations, because they are the world’s two largest economies. In a sense, the eyes of the whole world are fixed on their relations.

During the Cold War, peace was achieved through the notion of “mutually assured destruction.” Today’s world is different, however. In this context, what do we rely on for global peace and global development?

We need to realize “actually assured interdependence.” In other words, we can achieve development and prosperity through the interdependence of all countries and abandon beggar-thy-neighbor policies, because we are living in a global village and we are in the same boat.

There are many sectors in which China and the United States can work together. As two major countries on the world stage, they have a greater responsibility for global affairs and therefore need to take actions. With the Biden administration now in office, we can restart all dialogue mechanisms and look at how well we’ve done in the more than a year since the phase one trade agreement was signed. Particularly, given the impact of the pandemic, we need to discuss how we can use existing agreements to promote stability and economic and trade cooperation.

Meanwhile, both sides can consider making even minor changes in their tariffs, which are now at a high level of around 27 percent. Can each side symbolically lower tariffs, which will be welcome news for the entire world?

China and Europe have established a joint working group to explore avenues to WTO reform. Is it possible that China and the United States establish a similar group? Since climate change is an issue of great concern to both countries, can we work together to hold a climate change conference, at the corporate, then Track 1.5 and ultimately official levels?