Trump takes office on Sino-US trade relations on Friday

US President-elect Trump is about to enter the White House, and China-US economic and trade relations face many challenges. Many experts and industry insiders said that the three major issues of the RMB exchange rate, Sino-US trade relations, and manufacturing returns are the areas of greatest concern for Sino-US economic relations in the future. Sino-US economic and trade cooperation is determined by the objective reality of the integration of interests between the two sides. When the comprehensive trade war broke out, the United States found that China’s exchange rate manipulation was unlikely, but local friction was difficult to avoid. Local trade conflict or difficult to avoid
Sino-US trade is considered to be the area most likely to generate friction after Trump took office.
According to Trump's statement during the campaign period, the core of its economic policy is to increase infrastructure investment and increase demand to drive demand and promote growth. At the same time, after tax reform, the core competitiveness of enterprises will be increased, and the world's capital will be guided to invest and build factories in the United States, thus promoting the revival of American manufacturing. At the same time, using the strong position of the United States, fighting trade in the world, competing for trade status and trade profit margin.
At present, Trump nominates important positions such as the Secretary of State, the Director of the Budget and Management Office of the Minister of Finance, the Ambassador to China and the newly established White House National Trade Council leaders and representatives. Among them, letting the "hard-liners of China" lead the White House Trade Commission, the pressure on Sino-US trade should not be underestimated. Trump's nominated economic adviser, Peter Navarro, led the newly formed White House National Trade Commission, which is best known for its “hawkish position on China” and the appointment of the steel anti-dumping hardliner Robert Lighthizer as the US trade representative. Or take a tough trade stance toward China.
Many experts said that this reflects the Trump administration's tough stance toward China. In the future, the US government may adopt a tougher stance on Sino-US export subsidies and trade barriers. However, in order to avoid a double loss situation, the possibility of a comprehensive trade war between China and the United States is unlikely, but local trade frictions are inevitable and there will be more bilateral negotiations in the future.
Xiao Lian, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, believes that Trump’s large-scale trade war between China and the United States is difficult. First, it is difficult to reach consensus within the Republican Party. Radical practices will bring strategic and diplomatic risks. Second, Trump does not independently realize the power to impose a 45% punitive tariff on China. The law only allows the President to impose a maximum tariff of 15% on all imported goods within 150 days. Again, even so, China can file a lawsuit against the WTO for retaliation. Fourth, the United States cannot afford the severe economic recession and unemployment caused by the trade war, which will make Trump unable to achieve its strategy of prioritizing the development of the US economy and shake the political and economic foundation of its governance.
"Although the possibility of a full-scale trade war is unlikely, it is a high probability event to launch a game against individual industries with prominent conflicts of interest." Zhang Ming, a senior researcher at the Pangu Think Tank Macroeconomic Research Center, said that in order to return manufacturing jobs to the United States Trump's claims in trade protection mainly include exiting TPP, re-signing bilateral trade agreements with partners, and raising tariffs on some products.

It is difficult to determine China’s “exchange rate manipulation” technology
During the campaign, Trump repeatedly proposed that China would be listed as a currency manipulator and impose punitive tariffs on Chinese exports to the United States. According to industry insiders, according to the current US regulations, Trump is difficult to list China as a currency manipulator, and bypasses the International Monetary Fund and the World Trade Organization to determine that China manipulates the exchange rate and imposes tariffs in violation of international rules.
“The United States has determined that China’s technology as a currency manipulator is very difficult.” Wen Jiandong, a member of the University of Cambridge’s Management Society, said that first, exchange rate manipulation is aimed at currencies with appreciation pressure. Historically, there has never been a country because of currency in the foreign exchange market. Faced with depreciation pressure and entered the field of currency manipulation. Since September 2014, the RMB exchange rate has faced greater depreciation pressure, and the People's Bank of China has continued to operate the market to stabilize the RMB exchange rate instead of lowering the exchange rate. Second, China is listed as a currency manipulator and there is no basis in accordance with US standards. From 2007 to 2016, the nominal effective exchange rate of the RMB appreciated by more than 30%. China's current account surplus accounted for 10.% of GDP fell from 2.2% in the first three quarters of 2016. China's foreign exchange reserves fell from US$3.96 trillion at the end of June 2014. By the end of 2016, it was 3.01 trillion US dollars, so China does not meet the standards of the currency manipulators. Third, the identification of China as a currency manipulator will not be supported by the academic community and the international community.
Zhang Tao, vice president of the IMF, said recently that it is not easy to define China as a currency manipulator. The IMF has established procedures for assessing “currency manipulators” and will also assess the currency of all member states, and these assessments are bilateral and require the support of all member states. At the same time, some specific areas need to be considered through other platforms and carriers. The IMF's definition of the exchange rate survey will not be limited to only one member country, but will apply to all member states.
Trump's main policy of "returning to the United States" and its supporting tax incentives are intended to speed up the pace of US corporate retreats in China, which may cause some US-funded enterprises to withdraw capital from China or reduce their continued investment. In addition to US companies preparing to "return to the United States," some Chinese companies are also preparing to move their businesses to the United States. The "return to the United States" industrial policy is not conducive to China's industrial restructuring, reducing China's employment level, and causing great resistance to China's foreign investment policy. China should raise the awareness of enterprises to move abroad, and formulate corresponding countermeasures. Otherwise, it will be difficult to compete with American companies, and it will not be able to cope with the “manufacturing war” launched by Trump.

Sino-US trade and economic cooperation
Sun Jiwen, a spokesman for the Ministry of Commerce, stressed at a regular press conference on the 19th that Sino-US economic and trade relations are the "ballistic stone" and "propeller" of the relationship between the two countries. The essence of this is mutual benefit and win-win. The bilateral economic and trade cooperation between China and the United States has been continuously expanded, and the basis for cooperation has become increasingly solid. It has formed a blending of interests in "you have me, I have you".
According to data from the Ministry of Commerce, the trade volume between China and the United States increased from 2.5 billion U.S. dollars in 1979 to 511.9 billion U.S. dollars in 2016, an increase of 211 times. The trade volume between China and the U.S. has exceeded 100 billion U.S. dollars, and the U.S. maintains a favorable balance with China. At the same time, the two-way investment between China and the United States has grown rapidly. By the end of 2016, the two-way investment has accumulated over US$170 billion.
A US-China Trade Commission and the Oxford Economic Research Institute recently released a research report showing that US-China bilateral trade and two-way investment created about 2.6 million jobs in the US in 2015, contributing US$216 billion to US economic growth, equivalent to the United States. 1.2% of GDP. With the increase in purchasing power of the Chinese people, it is expected that by 2026, US exports of goods and services to China will increase to 369 billion US dollars, and will increase to 520 billion US dollars by 2050. The export of Chinese goods to the United States has lowered the price level of the United States by 1 to 1.5 percentage points. The average annual income of a typical American family in 2015 was $56,500, and Sino-US trade could help these families save more than $850 a year.
There are indications that China-US economic and trade relations have brought tangible great benefits to the two countries and the two peoples. "At present, the United States has heard some trade protectionism from time to time." Sun Jiwen stressed that the Sino-US economic and trade cooperation "coincidence Both interests and struggles are all wounded. This is determined by the objective reality of the integration of interests between the two sides.
“The possibility of cooperation between China and the United States in infrastructure investment is not ruled out.” Xiao Lian stressed that Chinese companies can participate in US infrastructure investment projects. Trump's new $600 billion infrastructure investment plan has a huge funding gap. China has accumulated rich experience in infrastructure investment. Both the scale of funds and operating efficiency are second to none in the world. If the two countries can cooperate on this, they will give The old infrastructure of the United States brings great returns.
Xie Yaxuan, chief macro analyst of China Merchants Securities, said that in the event of trade friction between China and the United States, some industries may be hit hard. Due to the strong competitive relationship between China and the US steel industry, the steel industry has always been seriously anti-dumping, and the trade representative Robert Truthaizer, which Trump will nominate, is also a “hard-line” in the steel industry, and the behavior of the United States will also be against Europe. The Japanese steel industry has formed a certain demonstration effect. Therefore, steel will be the most affected industry. In the past, China and the United States had a large number of two-way trade in mechanical products. Among them, China has a large amount of processing trade exports to the United States, so the two sides complement each other in this field. Although larger in scale, it is less affected by US trade protectionism policies. The negative impact of trade protection by trade protection is: steel>chemical>other metal products>paper products, rubber products, wood products>agricultural products>electromechanical, textile and garment.
Xie Yaxuan said that if China increases its restrictions on imports from the United States, the corresponding domestic industry will benefit relatively in the short term due to the reduction of external competition. From the two dimensions of China's sanctions and sensitivity to US products, the ranking of the Chinese industry's positive impact on the US trade protection policy is: chemical products>new energy related products>agricultural products, plastic rubber products. In addition, categories such as automobiles and soybeans, which are important industries in the United States and have high or high dependence on China, may also be subject to China’s “double opposition” and make imports relatively limited.

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