Why Beijing’s Allegations on Trade with Washington Are Not Adding Up

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There has been trade tensions between China and US for some time now. The fact is that the US plays a great economical role in the world and they should appreciate the good relationship they have had with China in the past. The trade war, which is being spiced up by the US, is likely to fail and the US should stop pushing for this trade war. Beijing is more than willing to stop the trade war. China will try its best to defend its position in trade regardless of how long this trade war may last. A white paper, which was released by the China State Council, seems to suggest that the trade idea developed by some Swedish economists in the 20th century is ideal for the new world order. This trade states that countries like the US with much capital and land would specialize on exports of capital and land goods like agricultural products.

Nations with much labor such as China would focus on labor-intensive products such as manufacturing. This model has been in place for over twenty years and has really helped the Americans and the Chinese. However, the available labor in China has decreased in 2017 for the first time in history. Just like in Russia and Japan, China has now become one of the nations with a large economy that experiences inadequate labor supply. In comparison to China, the US has increased the number of workers in the past five years. Nevertheless, China still holds the record of having more than a fifth of the world’s labor force.

According to information researched by the University of Groningen, China’s capital stock caught up with that of the US in 2012 and has been growing at a very high rate ever since. This is in comparison with the year 2000 when the US capital stock person was about twelve times that of China. Beijing’s capital stock change has really grown and is now catching up with the West. The Chinese foreign direct investment in the US was as low as $65 million in 2003 but now its $165 billion. This statistics are according to data from the commerce ministry.

One of the many things that are frustrating the US is the Made in China program 2025, which is aimed at high tech foreign acquisitions. This will reduce the number of workers and increase capital-intensive products. This is intended to making China a rival to compete with and not a just a partner. However, the US and China should end this trade war and focus on working together.

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