The United States has a wrong view of China! How can we get back on track? Ministry of Economic Affairs | Economy | United States
On August 11th, the Bloomberg News website published an article titled "The United States has a Wrong View of China: How to Get Back on Track" by Tom Olick, Chief Economist of Bloomberg News' Department of Economics. The article excerpt is as follows:
The US policy towards China has been constantly changing under the leadership of the past three presidents. Obama began a cautious turn, although he is still committed to cooperating with China, he has taken a stronger stance on issues such as protecting intellectual property. Under Trump's leadership, there was a decisive shift in US policy towards China from being friends to enemies, but the following policies - to put it nicely - were arbitrary and disorderly. During the Biden era, hostility still existed, but the strategy was improved by taking targeted measures, coordinating with allies, and investing in improving domestic competitiveness.
Nevertheless, the United States still views China with an extreme sense of anger, acting under a series of misunderstandings, which makes it even more difficult for it to implement the right policies. Perhaps that's why former US Secretary of State Henry Kissinger, who recently celebrated his 100th birthday, is still active. He once said that the two major countries in the world are standing at the top of the cliff.
The following are three major misunderstandings of China by the United States: Firstly, although there may be multiple outcomes, China will neither collapse nor take over the world. Although China's per capita gross domestic product is less than a quarter of that of the United States, if there is one thing that decision-makers in this country are clearly good at, it is to plan an upward path from low-income to high-income.
Bloomberg's Department of Economics predicts that China will stabilize the situation in 2023 and implement sufficient economic reforms to maintain an annual growth rate of approximately 4% until the end of this decade. In this situation, it will surpass the United States to become the world's largest economy in the early 1930s, but China will not gain a substantial leading advantage. In the foreseeable future, the United States and China will be companions and competitors. This means that the United States will have to adjust its long-term policy towards China.
Secondly, portraying the US China relationship as a survival struggle between democracy and authoritarianism - as the Biden administration has done - is not constructive. This also makes it easy for the United States to be accused of hypocrisy when dealing with other regimes.
The challenge facing the United States is to develop a policy towards China that aligns with its own values but does not come at the cost of sacrificing broader strategic goals. This means adopting more coherent policies and rigorous rhetoric than can currently be seen.
Thirdly, the rapid rise of the Chinese economy was not primarily - or to a large extent - achieved through deceiving the United States.
The main driving forces behind China's economic miracle are evident: the abundant labor force provided by a large population and the ability to achieve economies of scale. The huge market and world-class infrastructure in China have a strong attraction for American executives, who have a strong motivation to prioritize short-term gains from China.
The lesson of the United States is that more emphasis should be placed on transforming incentive measures and strengthening domestic competitiveness.
As China's experience over the past 40 years has shown, the benefits of strengthening its own strength are enormous. It's just difficult to achieve. Now is the best time to start doing this.