It’s not China’s fault that some US companies are going out of business
By
Zhong Sheng, People’s Daily
It
is already an old trick for some people in the US to pass the buck for whatever
crises that arise in their own country.
Recently,
they brought up the theory that China dumped goods onto the US market, striking
their industries and causing native companies to close down.
Filled
with anger, they condemned China as if the country has to take the blame for
the collapse of American companies. How unreasonable is that?
Anyone
with some insight will know immediately that the US is trying to frame China
and make the latter a scapegoat for its own fault.
China
has always traded with other countries legally and legitimately on the basis of
free trade. It is a natural economic phenomenon that Chinese goods show strong
competitiveness in international markets with relatively low costs of
production and high quality.
Some
US officials keep preaching free market competition, yet what they have done
doesn’t seem to conform to their words.
The
US randomly compared the price of products from a third-party country with that
from China and then determined that China dumped goods on the American market.
In
2014, the World Trade Organization decided that the 25 anti-dumping and
anti-subsidy investigations conducted by the US against China from 2006 to 2012
violated the WTO rules. Clearly, the US has abused the punitive measures.
Since
the US falsely diagnosed its problem, it is impossible for it to provide right
prescriptions.
In
2009, United Steelworkers (USW) claimed that a total of five
US tire factories closed and 5,100 workers became unemployed from 2004 to 2008.
Using
this as an excuse, America added 35 percent, 30 percent, and 25 percent
punitive tariffs for three consecutive years respectively on Chinese passenger
car and light truck tires. At one point, the export volume of affected tire
products to the US declined by more than 60 percent.
However,
the market share of US products didn’t increase and the country failed to
protect domestic industries or improve employment.
Within
three years, 1,200 jobs were added in the US tire industry.
However, American consumers spent $1.1 billion more on tire and related products
and the retail industry lost more than 3,700 jobs.
It
is a proven fact that accusing others with no warrant and even abusing punitive
tariffs could only bring unfortunate consequences.
With
the economy developing and the industry being upgraded, it is economic normalcy
as well as an objective law to eliminate some outdated production capacity.
In
the book The Choice: A Fable of Free Trade and Protectionism, American
economist Russell Roberts told a story about Ed Johnson, a fictional
US television manufacturer, who traveled to the future with David
Ricardo, proponent of comparative advantage theory.
Johnson
was very depressed when his television factory collapsed. But Ricardo told him
that the secret of success lies in comparative advantage and opportunity cost.
The
US can only maximize its profits by converting to the industry that it is
better at and making the products that bring more profits. Then it could use
the money it earns to buy TV sets. In the process, the US is still a winner.
Today,
the US has upgraded its industries to high-end manufacturing, modern service,
and etc. Over 80 percent of the job losses can be traced back to the improved
efficiency brought by new technologies.
This
is an inevitable trend in line with economic development as well as a pragmatic
choice made by the US itself. It is hard for the world to understand why the US
becomes so resentful and angry.
It
seems that the US got sick, yet it forced others to take medicine.
In
the era of economic globalization, market encourages countries to join the
international industrial chain with their advantages. The international
production system is increasingly connected and the division of labor is
becoming clearer.
While
enjoying the benefits brought about by the division of labor in the global
market, some US officials pretended to be the victims and even blamed other
countries for the collapse of American businesses in
market competition.
This
fully exposed the bullying nature of some Americans, who are good at making
things up to satisfy their greed for profits.
It
is impossible to address the issue in America by spreading rumors and smearing
other countries or by setting up thresholds and adopting trade protectionism.
The
escalating US-China economic and trade frictions unilaterally provoked by the
US have caused more and more American companies to lay off their staff, which
is a convincing evidence.
(Zhong
Sheng is a pen name often used by People’s Daily to express its views on
foreign policy.)
It’s not China’s fault that some US companies are going out of business
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