Li Daokui: The U.S. opened a knife on Sino-U.S. economy and trade, with consequences far beyond the Smoot-Holley Act.
In June 1930, under President Hoover, the United States passed the Smoot-Holley Act, which raised tariffs on more than 2,000 imports to the highest level in history. In the United States, 1028 economists signed a petition to boycott the bill. After the bill was passed, many countries took retaliatory tariff measures against the United States, which plunged imports and exports by more than 50%, and triggered a global economic depression in three years. The bill is also known as the most foolish act of the 20th century in the United States.
Li Daokui, Dean of the Institute of Economic Thought and Practice of Tsinghua University, said that the consequences of todays U.S. operation on Sino-U.S. economic and trade relations may far exceed the Smoot-Holley Act of that year.
Li Daokui: Today, the economic and trade relationship between China and the United States is the most critical link in the global economic and trade relations and an important part of the global value chain. To open up Sino-US trade relations is to open up the global production value chain and globalization. Its consequences are likely to far exceed the Smoot-Holley Act of that year. This basic history has been forgotten by Americans.
Bai Chongen: High consumption and low savings have caused the fault of the United States today.
In November 2016, on the second day of Trumps successful presidential campaign, a book called Rural Peoples Elegy suddenly hit the top of Amazons sales list. It was an autobiography written by a young man who came out of a poor family in the Rust Belt of the United States and eventually graduated from Yale Law School. From the book, we can see the decline of the once glorious industrial state today, and the strong dissatisfaction of the American elite from the bottom white people.
In 2016, J.D. Vances book The Rural Peoples Elegy was published.
Li Daokui believes that there is a earthquake-like fault in American economy and society. So how do faults form? Bai Chongen, Dean of the School of Economics and Management of Tsinghua University, explained that high consumption and low savings caused the fault in the United States today.
Bai Zhongen: Where do resources come from if you dont save and invest? Only from other countries. Overconsumption depends on other countries to help you produce. Domestic production capacity can not meet domestic consumption and investment needs, it must purchase goods from other countries. In this economic structure, such a large trade deficit is inevitable. It is impossible for any other country to maintain. Why can the United States continue? Because of the special status of the dollar. If the world needs the dollar, it will be willing to lend it to Americans so that the United States can maintain a long-term deficit. So its not surprising that China, on the whole, benefits the United States. But the United States did not subsidize those who suffered more from trade, resulting in uneven income distribution and the existence of fault.
Ruan Zongze: Chinas development is the answer, not the question
In early 2019, former US President Jimmy Carter sent a letter to current President Trump explaining how the Carter administration had tried to solve the economic friction with Japan. He received a call from Trump. A few days ago at the Bible Institute in Georgia, Carter revealed to the outside world that Trump said to him, China is far ahead of the United States in many ways, not only in the economy, but also in other important aspects.
During Carters tenure, he chose to cooperate with China and achieved a win-win situation for China and the United States for 40 years. As the founder of diplomatic relations between China and the United States, the 94-year-old former President of the United States told his successor by telephone that in the decades since the normalization of relations between China and the United States, the United States had been at war, spending about $3 trillion, while China had never waged war against any other country, and they had spent their money on infrastructure and education and other things that were good for the people.
Speaking of the dialogue between the two US presidents, Ruan Zongze, executive vice president of the Chinese Academy of International Studies, said that Chinas approach to problems was to actively reflect on and promote reform and opening up, while the United States outsourced its responsibilities and accused China. In fact, China is the answer, not the question.
Ruan Zongze: Why did it lead to such a crisis? My interpretation is that the United States lacks the habit of self-reflection, and when it encounters problems, it is always attributed to others. How on earth do you know China? Chinas development is the answer, not the question. In the era of globalization, no one is an isolated island. Even developed economies need larger markets. If developing countries cannot develop, it will also hinder the growth of the world economy.
In the face of the crisis, the three presidents of the United States have made different choices, which may also lead the world economy in different directions. Li Daokui said that at present, China has the responsibility to safeguard global trade liberalization. To do well in Chinas own affairs is to safeguard the world economy. Wu Xiaoqiu, Vice-President of Renmin University of China, believes that the essence of Sino-US trade disputes is the strategic containment of China by the United States. Trade warfare is only the starting point of strategic containment. We should highly predict risks and focus on protecting the vitality of enterprises. Wu Xiaoqiu: What we need to study now is how to think strategically about our strategies and highly predict future risks and trends. The most important thing is to protect our enterprises, give them full expectations and enthusiasm, and respect the innovative spirit of entrepreneurs. At the same time, we should establish a rich and diversified policy toolbox to deal with all kinds of unexpected events. Source: Wang Xiaowu_NF, Responsible Editor of Peng Mei News
In the face of the crisis, the three presidents of the United States have made different choices, which may also lead the world economy in different directions. Li Daokui said that at present, China has the responsibility to safeguard global trade liberalization. To do well in Chinas own affairs is to safeguard the world economy. Wu Xiaoqiu, Vice-President of Renmin University of China, believes that the essence of Sino-US trade disputes is the strategic containment of the United States against China. Trade wars are only the starting point of strategic containment. Risks should be highly predicted and enterprisesvitality should be protected.
Wu Xiaoqiu: What we need to study now is how to think strategically about our strategy and highly predict future risks and trends. The most important thing is to protect our enterprises, give them full expectations and enthusiasm, and respect the innovative spirit of entrepreneurs. At the same time, we should establish a rich and diversified policy toolbox to deal with all kinds of unexpected events.