Interview: U.S. takes wrong approach to fixing trade imbalance with China, says expert

Source: Xinhua| 2018-08-15 22:44:58|Editor: yan
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SAN FRANCISCO, Aug. 14 (Xinhua) -- The U.S. government is taking the wrong approach to addressing its trade imbalance with China by imposing hefty tariffs on Chinese products, which caused trade tensions between the world's two largest economies, a U.S. expert on China said Tuesday.

Tariffs will not fix America's trade imbalance, Handel Jones, CEO of the consulting firm International Business Strategies, Inc. (IBS), said in an interview with Xinhua.

What China is doing now is making significant investments in manufacturing and building products, he said, adding that U.S. consumers have to buy televisions and smart phones, which are made in China.

"That they are creating trade imbalance is really because the U.S. does not invest in manufacturing capacity, (and) the U.S. is not investing in basically developing products that also can be bought in China," said Jones, who travels to China regularly.

"When I go to China, I can find almost nothing made in the U.S. that I can buy," said the IBS chief who wrote several books on China and U.S.-China relations.

He said the United States needs to build its own industries and "we need to build capability of products that we can export."

He cited the field of 5G communication technology as an example, where the United States has little advantage over China. "In 2025 to 2028, China will have 1 billion 5G users."

The IBS CEO said that even two or three years ago, he had predicted that China was going to be one year or two years ahead of the United States in terms of 5G.

China is also making investment in robots, while American investment seems not as robust as China's, he said.

Jones said the United States is making some fundamental errors on how to maintain global competitiveness. "As a result, the trade imbalance has become significantly worse."

He cautioned that the United States is taking the completely wrong approach to China and the result of the China-U.S. trade spat is that China will be accelerating rapidly.

Jones offered some thoughts on how the United States can reverse its trade deficit.

"Trade imbalance has to be fixed. But while you fix it, it should be done by you becoming stronger, not hoping other countries becoming weaker. That's where we think the U.S. should change," Jones suggested.

Most important is that China becomes a strategic partner. "We have to exist together and so we have to be strong together," he said.

China has a bigger population than the United States and China should be a good market for U.S. products, he noted.

"Artificial intelligence (AI) is one area where there can be big room for collaboration between China and the U.S., and basically better and efficient energy is another area where they can conduct global collaboration," Jones said.

Other areas also include the medical field, where medical research promises a significant collaboration for Beijing and Washington, he said.

"There should be joint development activities between the U.S. and China and also collaboration in established manufacturing facilities, not only for present-day products, but products for 2025 to 2030," Jones suggested.

"The U.S. needs to change its position in terms of how to partner with China, instead of pushing to consider China as an enemy," he stressed.