The head of the China Banking and Insurance Regulatory Commission and the party secretary of the Chinese central bank has stressed Beijing’s confidence in the country’s economic prospects amidst escalating trade tensions with the United States.
Guo Shuqing (郭树清) made the following remarks at a press conference held in Beijing on 5 July.
On the unsustainable nature of a Sino-US trade war
“The trade war provoked by the US will eventually be difficult to sustain. We are firmly opposed to a trade war, and there will be no winners from a trade war.
“Over the past 40 years the rapid development of globalisation has led to fundamental changes in the state of international industry, and the world economy has become integrated to an unprecedented extent.
“The US has sizeable deficits in terms of goods trading, and there are many reasons for this, but this does not at all mean that the US is sustaining losses as a result.
“It’s precisely the opposite – the formation and continuation of the US trade deficit is a reflection of its economic and technological innovation, the competitiveness of its high-end services sector, as well its special international monetary and financial status.
“It is precisely because of this that the US has been able to enjoy all kinds of outstanding, low-priced goods hailing from places around the world, as well as funds that have always been low-cost.
“If we say that the current international economic order is irrational, then the United States in no way occupies a disadvantageous position.
“Because emerging market economies are capable of producing a vast volume of products at high-efficiency and low cost, over the past more than 20 years, the US and Europe have no longer been wracked by inflation, and have been able to rapidly recover from severe financial crisis.
“It’s also for this reason that the profits of multinational companies from developed countries have continually doubled.
“They possess a huge commercial presence in China, and their sales volumes can be counted in the trillions of US dollars.
“When it comes to China’s total imports and exports, foreign-invested enterprises account for a share of almost a half, as well as more than half of exports to the US.
“Striking against Chinese trade and investment is to a very large extent striking against the enterprises of multiple nations, including many US companies.
“Provoking a trade war both causes adversity for the targeted nation, as well as harms one’s own economy. This trade war will be eventually be difficult to sustain.”
On China’s economic resilience and the advantages of a socialist market economy with Chinese characteristics
“China’s economy possesses a strong capacity…the socialist market economy possesses marked systemic advantages when it comes to facing various difficulties and risks.
“However, this is in no way related to so-called ‘state capitalism.’ China has fulfilled its commitments to the World Trade Organisation, and can be said to be a paragon when it comes to abiding by free trade rules.
“Following the past several years of adjustments, China’s economic growth is no longer excessively dependent upon investment or exports, but has shifted towards a more balanced model in which consumption is primary.
“The Chinese economy has already emerged as a comparatively standard major economy, with a complete industry system, vast potential domestic demand, and a market of over 1.3 billion consumers that continues to maintaing rapid growth.
“In overall terms, the vast majority of China’s trade surplus is the result of private enterprises and joint-venture (state and private) enterprises, that are the most vital and resilient.
“Any form of external pressure can eventually be transformed into impetus for growth, and objectively speaking will accelerate supply-side structural reforms.”
On US efforts to contain the development of China’ s hi-tech industry
“Overall, China is still a developing nation. There is still a very large gap compared to developed nations when it comes to science and technology, but industry upgrade is the inevitable trend of China’s economic development.
“Development is the fundamental right of all nations, and continual adjustment and upgrade of the industry structure comprises the process of development.
“Restricting the structural upgrade of another country’s economy is equivalent to not allowing the people of that country to pursue a better life.
“The progress of human civilisation is achieved by means of exchange and interaction, free trade and investment are of benefit to all nations, and multilateralism serves the interests of the people of the whole world.
“The progress of the Chinese economy is something that no force will is capable of reversing.”