The State Council Information Office (SCIO) has published “China's Position Paper on Some Issues Concerning China-U.S. Economic and Trade Relations”, which can be downloaded here in docx format from the Xinhua News Agency website. The paper states: “As the world’s largest developing country, China is also the largest contributor to annual global economic growth. As the largest developed country, the United States boasts the largest economy in the world. The China-U.S. economic and trade relations hold profound significance for both countries and exert a substantial influence on global stability and development. Over the 46 years since the establishment of diplomatic relations between China and the U.S., bilateral trade and economic ties have developed steadily. The volume of trade between the two countries has surged from less than USD2.5 billion in 1979 to nearly USD688.3 billion in 2024. The China-U.S. economic and trade cooperation has continued to expand and improve, making significant contributions to economic and social development, and the well-being of the peoples of both countries.”
The paper goes on to state that China-U.S. economic and trade relations are mutually beneficial and win-win in nature. China and the U.S. are important partners in trade in goods, while the trade in services also maintains rapid growth. It confirms that China never deliberately pursues a trade surplus and the gains from economic and trade relations between China and the U.S. are generally balanced. The U.S. trade deficit has increased globally, while the proportion attributable to China has decreased. China is proactively adopting various measures to expand imports. China and the U.S. are also important two-way investment partners and both countries benefit from bilateral economic and trade cooperation.
The Chinese side has scrupulously honored the phase one economic and trade agreement, the position paper asserts. China has continued to strengthen intellectual property protection. It has improved the system for the protection of business secrets, pharmaceutical-related IP, trademarks and geographical indications, and actively promoted IP exchanges and cooperation with the U.S. The country is fighting cyber infringement and has strengthened IP-related law enforcement. China has prohibited forced technology transfers, strengthened confidentiality obligations for administrative departments and staff, and improved investment access. The country has granted greater access to food and agricultural products. Market access of financial services has been expanded.
China has maintained the basic stability of the renminbi exchange rate and has carried out market based exchange rate reform; China has actively expanded the scale of trade. It has exempted eligible U.S. products from additional tariffs and made significant progress in expanding imports from the U.S. But China has encountered multiple obstacles caused by the U.S. in fulfilling its obligations under the economic and trade agreement although it has maintained pragmatic communication with the U.S. regarding the agreement.
The U.S. has failed to meet its obligations under the phase one economic and trade agreement. The U.S. has failed to implement commitments on technology transfer and on trade in food and agricultural products. The U.S. also failed to fully implement commitments on financial services and exchange rate matters and failed to facilitate China's efforts to expand procurement and imports.
China upholds the principle of free trade and strictly complies with World Trade Organization (WTO) rules. The country has comprehensively strengthened trade policy compliance and fulfilled its commitments on tax reduction upon accession to the WTO. China has provided subsidies within a reasonable range in compliance with WTO rules. The Chinese government has continued to improve the business environment and expand access for foreign investment. It is fostering a level playing field in the market and treating domestic and foreign-funded enterprises equally in taxation. The country is actively promoting the development of digital trade.
Unilateralism and protectionism undermine China-U.S. Economic and Trade relations. Rescinding China's permanent normal trade relations (PNTR) status undermines the foundation of relations and revocation of China's MFN status violates WTO rules and destabilizes the global economic order. The abuse by the U.S. of export controls destabilizes global supply chains. The U.S. suppresses other countries in the name of national security and human rights.
The Section 301 tariff measures are a prime example of unilateralism and Section 232 investigations contravene multilateral rules. The U.S. abuse of trade remedy measures increases uncertainty in foreign trade. Investigations on transnational subsidies violate relevant rules and the abuse of “zeroing” artificially expands dumping margins.
The use of fentanyl as a pretext to impose restrictive economic and trade measures on China is not helping to solve problems. The U.S. accusations against China in the matter have no factual basis. The U.S. concerns about duty-free “de minimis” treatment are unnecessary as it follows the trend of world trade development. The reciprocal tariffs imposed by the U.S. will damage its own and others' interests.
China and the U.S. can resolve their differences through equal-footed dialogue and mutually beneficial cooperation to realize their respective development goals. The paper concludes that cooperation between China and the U.S. is of great mutual benefit, while confrontation will bring nothing but damage to both sides.
