(Yicai Global) Jan. 12 -- Most participants at the China Economic Forum believe both China and the US will lose if a trade war breaks out.
The forum, organized by China Finance 40 Forum and Peterson Institute for International Economics, was held in Washington yesterday, state-owned news agency Xinhua reported. One participant argued that China would not dump US Treasuries to counter the American trade policy.
The two countries have become important trade partners and are becoming increasingly reliant on each other for economic development, said Ha Jiming, a senior researcher for CF40. Data shows that China has maintained a surplus against the US in trade in goods and American service exports to China have consistently outstripped imports, he added.
Both countries will lose out if frictions are solved by trade sanctions, Ha said.
Chad Bown, a senior fellow at PIIE, expressed concern over recent investigations that US President Donald Trump’s administration conducted against China products, noting that a trade war is not in the interests of either country. He believes the pair should solve issues through consultation.
Another senior fellow at the US institute, Nicholas Lardy, argued that China will not sell American Treasury bonds in retaliation against the trade measures. China is one of the US’s biggest credits, and would incur losses if it dumps bonds there, he said.
The escalation of trade frictions is normal given the deepening economic ties between the pair, added PIIE’s Jeffrey J. Schott. The countries will not sign a bilateral agreement on trade issues in the near future, but there is scope for a China-US collaboration in e-commerce and the service sector, so they will be able to find common interests in many other markets, he said.
China will continue to deepen economic reforms and its economy will maintain a relatively high growth rate, said Lin Yifu, former chief economist at the World Bank and a CF40 advisor. The two countries still have a solid foundation to develop mutually beneficial economic and trade relationships, he added.
China will contribute more to the global economy and get a bigger voice in international affairs, Lin continued, saying its experience will help benefit more developing nations.