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Ambassador Zhou Pingjian: The Chinese Economy is not a Pond, but an Ocean

On September 1, 2019, Nigerian newspaper Business Day published an article written by Ambassador of China to Nigeria Dr. ZHOU Pingjian. The full text goes as follows:

China-US trade talks have been catching the eye of the Nigerian media for some time.

At the end of June, the Chinese and US Presidents reached the following consensus in Osaka during the G20 Summit: Restart trade consultations on the basis of equality and mutual respect; no new tariffs on Chinese exports by the US side; negotiation teams ready to discuss specific issues thereafter.

At the end of July, China and the US held the 12th round of high-level economic and trade negotiations in Shanghai. Both sides agreed to undertake intensive talks in August in preparation for the meeting between the heads of negotiation teams in September.

Though we still recall those words vividly, soon after the Shanghai negotiations, the US went back on its word and unilaterally announced an additional 10 per cent tariff on US$300 billion worth of Chinese goods as well as designated China as currency manipulator ignoring the facts. It clearly runs counter to the leaders' consensus and the correct direction. This again shows the world how flip-flopping the US can be.

What is more ridiculous is that the US calls black white and tells lies, accusing China of failing to fulfill its commitment to purchase American agricultural products and take effective measures to stop the flow of fentanyl into the US. However, from the Osaka meeting till the end of July, 2.27 million tons of American soybeans have been shipped to China. From May 1, China started class scheduling of all fentanyl-like substance with more rigorous standards than the US. As for the so-called currency manipulator, in the report released by the IMF this July, China’s current account surplus was only 0.4 percent of GDP in 2018, which is far below the American criteria (an overall current account surplus over 3 percent of the country's annual GDP) for what constitutes manipulation. So designating China as currency manipulator is an absolutely groundless statement.

We Chinese always believe that one's word shall be kept at all costs. As Confucius observed over 2000 years ago, "One must keep one's word with results-oriented actions." This is part of our cultural tradition and a way of life for the Chinese people. When it comes to abiding by international treaties and fulfilling international obligations, China has a very good track record.

The US, on the contrary, has been breaking commitments, overturning consensus and trampling on rules at every turn. Just look at its withdrawal from the Paris Agreement, the JCPOA, and more recently, the INF treaty. It never hesitates to renege on its earlier major commitments that bear on global strategic balance and stability. Does it have even a shred of credibility left?

The US decision to further raise tariffs violates the two presidents' Osaka consensus, tramples on multilateral trading rules, harms both countries' interests, threatens the security of the global industrial chain and supply chain, and drags down global trade and world economic growth. It is not constructive in any way and no one, not even the US itself, stands to gain.

What’s more, resorting to a trade war to fix its domestic problems, the US is in fact drinking poison to quench its thirst. After the US announced the imposition of additional tariffs on $300 billion worth of Chinese goods, the three major US stock indexes all closed lower. Four large US retail trade groups immediately made statements to voice criticism and opposition, saying the tariffs have already slowed down the US economy and caused uncertainties. The new round of tariffs is using American families as a hostage in the trade war negotiations. American families should not be a pawn in this trade war. The tariffs will hit US consumers far harder than Chinese manufacturers.

40 years after China and the US established diplomatic relations, the two economies have developed a mutually-beneficial relationship with intertwined interests. US companies' annual sales in China stand at more than $700 billion and their profits reach more than $50 billion. If one side has been ripping the other off, it would not have been possible to have the highly-complementary, deeply-integrated and mutually-beneficial relationship that we have today. Deliberately "decoupling" the two is bound to threaten the security of the global industrial chain and supply chain, give rise to fluctuations in the global financial market and hamper global trade and world economic growth. It would be going against market economy laws, free competition rules and the trend of economic globalization. All stakeholders, including US businesses, will be sure to question and oppose such a move.

China does not accept any maximum pressure, threat or blackmail. On major issues concerning our principles, we won't back down even a little bit. China's position on China-US trade talks is consistent as always. If the US wants to talk, our door is wide open. But if it insists on a trade war, we will fight to the end with firm resolve. Now the ball is in the US court. It needs to demonstrate good faith. The world is watching.

Over the past seven decades since the founding of the People’s Republic of China, enormous achievements have been made in economic and social development in China. Domestic consumption has become the major driving force for economic growth, giving it much leeway in formulating development strategies. At the same time, as foreign investment environment keeps improving, China has become one of the most popular destinations for global investment for many consecutive years. In the first five months of this year, investment from Germany, the ROK, Japan, the UK and the EU in China increased by 100.8 percent, 88.1 percent, 18.9 percent, 9.2 percent and 29.5 percent respectively. As for Africa, the bilateral trade volume between China and Nigeria also soared to 7.05 billion dollars in the first half of 2019, 22.4 percent higher than the previous year. When choosing investment destinations and business partners, enterprises make decisions based on their own interests and market principles rather than empty words from certain persons. The so-called US businesses pulling out of China sounds more like a political slogan than a practical measure. Even if the pullout actually happens, others will naturally fill the vacancy. At the end of the day, it's still the US that will suffer.

President Xi Jinping announced in his keynote speech at the opening ceremony of the Second Belt and Road Forum for International Cooperation that China would adopt a number of major reform and opening-up measures, strengthen institutional and structural arrangements, and promote opening up at a higher level. Measures to be taken include expanding market access for foreign investment in broader areas, strengthening international cooperation on intellectual property protection, increasing imports of goods and services, implementing more effective international coordination on macro-economic policies, and putting more focus on the implementation of opening-up policies. A more open China will have more positive interactions with the world, which in turn will advance the development and prosperity of both China and the world.

As President Xi stated at the Opening Ceremony of the First China International Import Expo last November, “China is the world’s second largest economy. We have a market of more than 1.3 billion consumers who live on the land of over 9.6 million square kilometers. To use a metaphor, the Chinese economy is not a pond, but an ocean. The ocean may have its calm days, but big winds and storms are only to be expected. Without them, the ocean wouldn’t be what it is. Big winds and storms may upset a pond, but never an ocean. Having experienced numerous winds and storms, the ocean will still be there! It is the same for China. After going through 5,000 years of trials and tribulations, China is still here! Looking ahead, China will always be here to stay!”

No challenge will hold back China’s development.

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