Original title: [interpretation] seriously talk about the impact of trade opposition on China and the public
[chivalrous Island Press]
Since the start of the US trade war and China's forced response, the domestic discussion has been very enthusiastic. After all, this involves the two largest economies in the world, and more about the market, people, life and confidence.
We have recently been in the background to leave a message to us in the background, to listen to Uncle Dao's analysis of how much impact the trade war may have on China and how it affects the life of the common people. Some people also say, you see the thousands of lists listed by the US Department of Commerce, clearly telling the people how much China is "harmful" to them, but why don't China do such things? Will the US tax increase ambitions not increase the prices of consumer goods?
This is a highly professional technical activity, so we once again invited the island uncle who specializes in economic and trade issues to answer. (shortly before the publication of this article, Trump's $200 billion tax list came out again, known as at least two months later.)
To put it simply, the United States has launched a trade war, and China's biggest direct impact is to increase exports to the US. Our countervailing efforts to impose tariffs on some imported American products may also bring some burden to our downstream manufacturers and consumers.
Can China bear the impact of trade war? We can analyze it from two aspects: macro and micro. If you think more about macro analysis, you can pull it directly into micro technology analysis.
Looking at the overall situation of China's economy, industry and trade, there are some basic characteristics that determine that China can better withstand the cost of countertrade.
First, China has been the largest manufacturing country with 39 major industrial categories, 191 middle classes and 525 small categories. It is the only country in the world that owns all industrial categories of the United Nations industry. This is not only an important source of China's competitiveness, but also the biggest source of China's response to the external trade war.
On this basis, China is not afraid of the US extreme measures in the trade war (similar to the initial trade embargo against China in the early days of the founding of the nation), as it will only lead to a large cut off of its own domestic market supply, nor fear that retaliation against US trade will increase the price of domestic manufactures too much, but can replace it as an import substitute. To promote the localization or develop the export oriented advanced manufacturing industry.
Secondly, the share of the bulk goods imported from the United States in China is not very high in the Chinese market, the highest 30% up and down, more is one percent twenty, most of them are primary products, and can be more substitutable. This determines that the impact of China's peer retaliation on the supply of related goods is relatively small, and correspondingly, the impact on related production and employment is also small.
At the same time, when formulating retaliation measures, we have taken into account the potential negative effects and formulated remedial measures. According to the Ministry of Commerce (Ministry of Commerce) in July 9th, "China has taken full consideration of the substitution of imported products and the overall impact on Trade and investment in the process of studying the list of tax counter products in the United States. At the same time, we will take the following measures to mitigate and eliminate the impact of the trade war on our enterprises and employees, and welcome the reflection of the community, especially the more seriously affected enterprises to the Ministry of Commerce and the local government departments. "
The measures taken by the Ministry of Commerce include, "continuous assessment of the impact of various types of enterprises", "the increase of tax revenue in the anti system measures is mainly used to alleviate the impact of enterprises and employees", "to encourage enterprises to adjust the import structure, to increase soybean and soybean meal and other agricultural products, as well as aquatic products in other countries and regions." "Import of automobiles", "accelerating the implementation of the State Council's effective utilization of foreign capital and promoting the development of high quality economy".
We can carefully study China's list of tariff retaliation against the United States.
In June 16th, the Ministry of Commerce issued the notice on tariffs on some commodities originating in the United States. The basic spirit is "homomorphic revenge". The announcement contains two retaliatory lists, which are similar to those imposed by the United States on additional taxes on Chinese goods, plus 25% tariffs.
The first list is agricultural products, cars, aquatic products and other goods imported from the United States. In 2017, China imported some of the goods from the United States to about $34 billion. This part has imposed tariffs since July 6, 2018.
The second list is imported from the United States, medical equipment, energy products (including coal, crude oil, refined oil, liquefied petroleum gas, etc.). In 2017, China imported about $16 billion from the United States. Whether the second lists will be executed and effective time will be announced separately according to the US action.
According to the "Customs Statistics" table 16 "part of the state (region) import chapter of the sum of money", the first retaliation list has been implemented, mainly in the following import commodity chapters. Uncle Dao made a form and suggested a horizontal screen.
The above Chinese countervailing commodities can be divided into several categories.
The first category is purely consumption which has little impact on the national economy and people's livelihood. The most typical one is the first list of 503rd "retail packaged dog food or cat food canned", 504th "retail packaged dog food or cat food", and Chinese shovel officials do not have to feed their pets in the US cat food and dog food.
As for some American fruit and nuts that have begun to go back to the retail market in large cities in recent years, although uncle isdo likes it, it is not necessary to live, imports are not much (US $770 million), and it is also easy to use and replace imports from other countries.
The second category is very important to the national economy and the people's livelihood, but there are still few and easily substituted products from the US. The first list of grain, meat, aquatic products, milk, cotton, second lists of coal, crude oil, liquefied petroleum gas, and so on, all belong to this kind.
At present, Russia, Australia, Argentina, Outer Mongolia, New Zealand and other countries and Europe are competing for China's grain, meat, aquatic and dairy markets, especially New Zealand, Australia, West Africa and other fisheries development potential. The Chinese fishery enterprises may take this opportunity to go and believe in the relevant ministry. The door will support you. As for energy products, the mutual benefit and cooperation between China and the United States has great potential, but the bilateral trade is not particularly large at present. It is not difficult to rely on the import of domestic and other countries.
The most important thing in this category is cotton. China is the largest textile and garment producer and exporter in the world. It occupies about 36% of the global market. We must avoid retaliation of the measures to weaken the competitiveness of China's textile and garment enterprises.
To this end, we can increase imports in addition to domestic cotton, and increase imports from Central Asia and Africa, and increase the import of cotton from poor countries. As a "international aid for poverty" assistance measures can be considered as a "international aid for poverty", and a part of the tariff increase for trade retaliation can also be used to relieve us. The impact of the textile and garment enterprises.
The third category is very important to the national economy and the people's livelihood, and imports from the United States and the market occupies a relatively high proportion of goods that are more difficult to replace. The most typical is the soya bean. The market share of us soybeans in China is around 1/3, which may be the largest share of us bulk goods in the Chinese market.
Over the years, China's soybean market has always been the leading actor in imported soybeans. In 2017, the output of beans was 19 million 170 thousand tons (including soybeans and beans), and imported soybeans amounted to 95 million 530 thousand tons. The main reason for importing so many soybeans is to squeeze oil and produce soybean meal for animal husbandry and aquaculture. If the problem is not well solved, the quantity and price of Chinese national meat consumption will be significantly affected.
In this regard, we have already made a deployment to expand the area of soybean planting in China, and carry out a zero tariff on a series of national soybean imports, while China can also conveniently obtain alternative sources from other countries such as Russia, Argentina, Brazil and other countries.
In addition, the demand for soybean meal in China has increased greatly, so that our country of soybean origin and the traditional soybean exporter have become the largest importer of soybeans. One of the key reasons is that the government has pushed forward the development of large-scale modern aquaculture in these years. As demand for industrial feed increased, soybean meal demand increased.
In the current trade war, we can consider a moderate relaxation of the restrictions on the traditional small farmers in the rural areas with low population density so that they can use a part of the mixed feed to replace the industrial feed of soybean meal, thereby reducing the pressure on the demand for soybean meal in our country.
The fourth category is a product that is expected to be a substitute for domestic imports, such as the car products in the first list, and the products of petrochemical, plastic, rubber and medical equipment in the second list.
China has been ranked the world's largest auto producer and sales market for many years, and has great potential to further expand automobile production and export. Most of the US exports to China are European and Japanese brand cars produced in the US. I have repeatedly stressed that the United States has launched a trade war on the world, and the war has spread to the auto industry, and it may soon have hundreds of billions of dollars in trade in cars that are actually imposed on tariffs; China has greatly relaxed foreign policy at this time, including the cancellation of the upper limit of the joint venture car company in China.
This means that the combination of different countries' policies is likely to create an opportunity for a foreign auto enterprise to seek a large-scale increase in investment in export oriented automobile production projects in China, which is a potential opportunity for Chinese industry and China's national investment and investment departments to close and seize.
As for refining, petrochemical, plastics, rubber and other industries, the domestic production capacity is quite large, restricting imports, just to increase the utilization of domestic capacity.
It is worth mentioning that there are second large medical devices in the list. Now, the three foreign companies of General Electric (GE), PHILPS and SIEMENS have basically monopolized the large medical instruments in domestic hospitals, and the domestic goods are far from them. At the same time, the import of large medical equipment is characterized by high price and high profit. Therefore, in the case of added tariff, it is suggested, supported by the agent and the manufacturer, and the manufacturer takes the tax to avoid raising the price of the hospital and further improving the price of medical service.
In fact, according to the information I know to the agent concerned, the Ge Corp has sent a letter to the Chinese agent that the company itself bears the added tariff and does not raise the cost of the agent's purchase. On the one hand, we can eliminate the fear of improving the cost of medical services. On the other hand, it is also a warning to domestic manufacturers that it is necessary to make enough effort to catch up with even the replacement of the giant.
In conclusion, we can say that the cost of trade in this part of China is affordable. If used well, it may also become an opportunity for some high-end products to be made domestically.
Wen / Mei Xin Yu
(Ministry of Commerce, international trade and Economic Cooperation Research Institute)
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