战略与国际研究中心-The-Freeman-Chair-China-Report,-April-2018_7页_905kb

Freeman Chair China Report Summary (April 2018)

Core Content

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The report, "Surviving March Madness", is authored by Scott Kennedy and focuses on the U.S.-China trade tensions under the Trump administration. It analyzes the broader implications of the trade war and the challenges the U.S. faces in addressing China's industrial policy practices.

Main Points

• U.S.-China Trade Tensions: The trade war is not just about tariffs but about constraining Chinese industrial policy, which includes technology transfer requirements, subsidies for pre-competitive R&D, and state-backed acquisition of U.S. tech firms.

• The 301 Report: The U.S. Trade Representative (USTR) report outlines 215 pages of evidence against China's practices, highlighting four key areas:

  • Technology transfer requirements
  • Discriminatory regulations
  • State-backed acquisitions of U.S. firms
  • Ongoing cyber espionage

• China's Stance: Despite U.S. pressure, China has not relented on its industrial policy and continues to pursue its strategic goals. The report suggests that China may view the trade war as an opportunity to remove constraints on its economic model.

• U.S. Strategy and Challenges:

  • The U.S. has underestimated China's resolve and risk tolerance, especially under President Xi Jinping.
  • The administration has alienated allies by using unilateral tactics, such as withdrawing from TPP, abandoning TTIP, and imposing tariffs on steel and aluminum.
  • Domestic unity is also a challenge, as the administration has not consulted with industry or labor, leading to market uncertainty and potential political pressure.

• Tariff Implications: The U.S. proposed a 25% tariff on $50 billion worth of Chinese goods, but this could harm global supply chains and alienate foreign suppliers. In contrast, China’s retaliatory list focused on commodities to avoid collateral damage.

• Need for a Principled Approach: The report argues that the U.S. should not settle for a quick, superficial victory. Instead, it should pursue a comprehensive strategy to open up markets and reform China's industrial policies.

• Recommendations: A Top 10 list of reforms is proposed, including:

  • Limiting subsidies for pre-competitive R&D
  • Removing ownership caps and joint venture requirements
  • Eliminating technology transfer mandates
  • Lowering tariffs on manufactured goods
  • Opening up value-added services
  • Adopting market-based standards
  • Reforming cybersecurity regimes
  • Liberalizing government procurement
  • Neutralizing bank interest rate guidance
  • Increasing regulatory transparency

Key Events and Publications

• Recent Events (March 2018):

  • Chen Chu's Speech: Discussed human rights and democracy in Taiwan.
  • China's Annual Legislative Session: Analyzed Xi's consolidation of power and implications for U.S.-China relations.
  • Taiwan-U.S.-Japan Relations: Explored economic, political, and security dynamics.
  • Controlling Pollution in China: Examined progress and future plans.

• Publications:

  • "No Domestic Consensus in China on ZTE" (April 25, 2018)
  • "Coordinated Chaos" (April 18, 2018)
  • "Finding the Right Off-Ramp from the Trade War" (March 27, 2018)
  • "Surviving March Madness in U.S.-China Trade Relations" (March 27, 2018)
  • "Is the US Ready for a Trade War?" (March 6, 2018)
  • "Seven Chinas" (February 5, 2018)
  • "Onward & Upward: An Update on China & the Global Innovation Index" (January 30, 2018)
  • "Meeting the China Challenge: Responding to China's Managed Economy" (January 29, 2018)
  • "The New Southbound Policy: Deepening Taiwan's Regional Integration" (January 19, 2018)
  • "Evaluating CFIUS: Challenges Posed by a Changing Global Economy" (January 9, 2018)

Conclusion

The report emphasizes that the U.S. trade war with China is a contest of wills, not just a bilateral dispute. It stresses the importance of international and domestic unity, principled negotiation, and targeted reforms to achieve a meaningful outcome. The U.S. must move beyond unilateral actions and seek broader cooperation to challenge China's industrial policy effectively.

Key Authors

• Scott Kennedy: Deputy Director of the Freeman Chair in China Studies and author of the report.
• Christopher K. Johnson: Senior Adviser and Chair of the Freeman Chair.
• Claire Reade, Dan Rosen, Logan Wright, and Charles Freeman: Senior Advisors and Associates involved in the project.

Summary of Recommendations

This report underscores the complexity of U.S.-China trade relations and the long-term stakes involved in addressing China's industrial policies.