Yu Zhen Wang Jingyu: Evaluation and Outlook of the Biden Administration's Trade Policy Toward China
Author: Yu Zhen, Professor, School of Economics and Management, Wuhan University, Director of the Institute of Economics of the United States and Canada, Wuhan University; And Wang Jingyu, Ph.D. candidate, Institute of China Border and Oceanography, Wuhan University
Source: Contemporary American Review, No. 4, 2021; Contemporary American Review
WeChat platform editor: Zhou Yue
The Biden administration's trade policy toward China is an important issue of common concern between China and the United States and the world. From the perspective of policy starting point, the main "legacy" inherited by the Biden administration in the field of Sino-US economic and trade relations is the sino-US phase one economic and trade agreement; from the perspective of basic propositions, Biden's campaign commitments, actual policies since taking office, and the latest speech of the US Trade Representative all reflect that the Biden administration does not deny the competitive factors in Sino-US economic and trade relations, but there are certain differences with the previous administration in terms of specific administrative principles and policy tools; from the perspective of the current situation of Sino-US competition, the economic interests of the two sides are both conflicting and confrontational. It is also complementary and cooperative, and "centrifugal force" and "centripetal force" coexist. The Biden administration is likely to continue the overall trend of the United States strengthening strategic competition with China, but it will choose a more focused and flexible strategy in terms of specific trade policy priorities and policy tools.
【Keywords】U.S. trade policy toward China; U.S.-China Phase I Economic and Trade Agreement; U.S.-China Relations; Biden Administration
Trade is the most traditional, basic and important form of foreign economic relations, and the trade field, as one of the areas with the closest ties and deeply intertwined interests between China and the United States, has always been regarded as the "ballast stone" and "propeller" of bilateral relations. In particular, as the world's two largest economies, the trade relationship between China and the United States is not only related to the well-being of the two peoples, but also to the prosperity and stability of the world. After experiencing the Trump administration's extremely aggressive and competitive trade policy toward China, how the Biden administration will adjust and formulate a new trade policy toward China has become an important issue of common concern between China and the United States and the world. Starting from the starting point of the Biden administration's trade policy toward China, this article summarizes and sorts out the Biden administration's campaign commitments, policy choices since the beginning of the administration and the latest trade policy statements toward China, measures and evaluates the fundamentals of the current Sino-US trade interaction, and predicts the future direction of the Biden administration's trade policy toward China on this basis.
A starting point for the Biden administration's trade policy toward China
Although there are differences in the governing philosophy and policy ideas between the Biden administration and the Trump administration, trade policy is not a rootless tree and a castle in the air, and the policy choices of the current administration are difficult to abandon or reverse the "political legacy" that the previous administration has accumulated. For the Biden administration, the biggest "legacy" left by the Trump administration in the field of Sino-US trade relations is the phase one economic and trade agreement finally signed by China and the United States after many rounds of games and arduous negotiations. In fact, both the U.S.-China trade talks since the Biden administration took office and the vision of the Biden administration's trade policy toward China, first articulated by U.S. Trade Representative Katherine Tai, see this agreement as an important foundation for the current U.S.-China trade relationship. It can be said that the specific content, completion and impact on the economy of the first phase of the Sino-US economic and trade agreement constitute an unavoidable and important starting point for the Biden administration's trade policy toward China.
(1) The main contents of the first phase of the Sino-US economic and trade agreement
After nearly three years of arduous negotiations, China and the United States formally signed the Economic and Trade Agreement between the Government of the People's Republic of China and the Government of the United States of America (the "Sino-US Phase I Economic and Trade Agreement") in Washington on January 15, 2020. The agreement is divided into nine chapters: preamble, intellectual property rights, technology transfer, food and agricultural trade, financial services, exchange rate and transparency, expanded trade, bilateral assessment and dispute settlement, and final clauses, which mainly stipulate more specific topics in three aspects: expanding trade flows, improving in-depth integration and coordination, and setting up assessment and dispute resolution mechanisms.
First, China and the United States have made targeted arrangements for expanding trade flows. In the agreement, both China and the United States believe that "expanding trade cooperation is conducive to improving bilateral trade relations, optimizing resource allocation, adjusting the economic structure, and promoting sustainable economic development." Based on this consensus, China and the United States have devoted a great deal of space to detailing their plans to increase trade flows in the chapters and appendices on "Trade in Food and Agricultural Products" and "Expanding Trade." China has committed to expand its procurement and imports of no less than US$200 billion in manufactured goods, agricultural products, energy products and services (as detailed in Table 1) from the United States over a two-year period from January 1, 2020 to December 31, 2021, on top of the 2017 baseline, and to continue to maintain the growth of trade flows between the two countries for the next four years.
Second, China and the United States reached a basic consensus on issues of deep integration such as intellectual property rights, technology transfer, financial services, macroeconomic policies, and exchange rates. On intellectual property issues, the United States acknowledged the fact that China had changed from a consumer of intellectual property rights to a producer of intellectual property rights, and China also reaffirmed the importance of strengthening the protection and enforcement of intellectual property rights to building an innovative country and promoting high-quality economic development, and the two sides further agreed to strengthen cooperation in key areas such as drug-related intellectual property issues, patent validity periods, geographical indications, combating the production and export of pirated and counterfeit products, sales on e-commerce platforms, and combating malicious trademark registration. On the issue of technology transfer, the United States and China recognize the importance of ensuring that technology transfer is carried out on voluntary and market-based terms and agree to engage in scientific and technical cooperation where appropriate. On the issue of financial services, China and the United States believe that there are broad cooperation opportunities and mutual benefits in the field of bilateral trade in services, and commit to relax restrictions and strengthen cooperation in seven major areas: banking services, credit rating services, electronic payment services, financial asset management (non-performing debt) services, insurance services, securities and fund management, and futures services. On the issue of macroeconomic policy, exchange rate and transparency, China and the United States have reached a common goal of enhancing economic fundamentals and promoting economic growth, and agreed to jointly maintain the stability of the international monetary system under the premise of respecting each other's monetary policy autonomy and in accordance with their commitments on exchange rate issues in the G20 Summit Communiqué.
Third, China and the United States have set up an evaluation and dispute resolution mechanism for the implementation and supervision of the agreement. In order to avoid the escalation of economic and trade disputes and their impacts to other areas of bilateral relations, China and the United States put forward the basic principles of fairness, speed and mutual respect for trade consultations, and agreed that the Vice Premier of the State Council of China and the Us Trade Representative would take the lead in establishing a "Trade Framework Group" to be responsible for the overall implementation of the agreement and future work arrangements. At the same time, the two parties also agreed in the dispute settlement mechanism that if one party is delayed due to natural disasters or other unpredictable circumstances beyond the control of both parties, and the obligations of this agreement cannot be performed in a timely manner, the two parties shall consult.
(2) Assessment of the implementation of the phase I economic and trade agreement between China and the United States
The first phase of the Sino-US economic and trade agreement is an important "political legacy" inherited by the Biden administration from the previous administration, and the implementation of the agreement directly constitutes an important basis for the Biden administration to formulate trade policies with China. The most important, intuitive, and easiest to quantify and evaluate in the agreement is the specific arrangements between China and the United States to expand trade flows. In terms of its implementation, although China has kept its promises and actively fulfilled the agreement, due to the uncertainties such as the new crown epidemic, the EXPORT supply of the United States and the operating environment of the world economy have encountered great difficulties, and the implementation of the first phase of the Sino-US economic and trade agreement is facing multiple challenges.
First, from the overall situation, under the huge impact of the global pandemic of the new crown epidemic, China has still kept its promises and actively fulfilled the agreement. In 2020, the total value of bilateral trade in goods between China and the United States reached 4.06 trillion yuan, an increase of 8.8%, of which imports from the United States were 931.87 billion yuan, an increase of 10.1%, and imports of agricultural products were 162.74 billion yuan, an increase of 66.9%, in stark contrast to the change in the total value of imported goods in China's overall year-on-year decline of 0.7 percentage points. From January to August 2021, China continued to increase imports from the United States, with the total value of imported goods reaching 661.78 billion yuan, an increase of 36.5% over the same period in 2020. If we break down the annual target of 2021 increase in imports of goods in the first phase of the Sino-US economic and trade agreement compared to the 2017 base period into each month, China has achieved a growth target of 63% from January to September 2021, and has completed the growth target of 82% in agricultural products at the production end that are less affected by uncertain events such as the epidemic.
Second, due to the serious impact of uncertainties such as the global spread of the COVID-19 pandemic on the EXPORT supply of the United States, the full implementation of the first phase of the Sino-US economic and trade agreement faces direct challenges. Specifically, the COVID-19 pandemic is the most serious infectious disease pandemic in the world in a hundred years, which has brought huge shocks to global politics, economy and society. As the country with the worst COVID-19 pandemic in the world, measures such as social distancing and work and production stoppages led to a widespread shutdown of domestic economic activity in the United States, with the unemployment rate reaching 14.7% in April 2020. The shutdown of production activities has severely reduced the supply capacity of the United States to goods and services, which directly affects the achievement of the growth target of trade flows in manufactured goods and energy products in the first phase of the Sino-US economic and trade agreement. In addition, the COVID-19 pandemic has hampered logistics and people movements, increased trade costs between China and the United States, and further made it more difficult to implement the phase one economic and trade agreement.
Third, in addition to the direct impact of the new crown epidemic itself, the panic caused by the spread of the epidemic has also provided a new impetus for the "hawks" in the US government to promote a more thorough "decoupling" from China, which has caused great interference in the relaxation of Sino-US economic and trade relations and the implementation of the agreement. Specifically, under the dual pressure of the new crown epidemic and domestic contradictions, the Trump administration has played the "China card" and adopted the tightening of channels for Chinese enterprises to go public to the United States for financing, strengthening export controls on emerging technologies, significantly expanding export controls on China's military end products and users, strengthening national security reviews of Chinese enterprises investing in the United States, intensifying the crackdown on China's so-called "network theft" and "economic espionage", and increasing "violations" A series of "decoupling" policies, such as the crackdown on experts and scholars participating in Various Talent Programs in China or cooperating with Chinese scientific research institutions, have directly hindered the effective implementation of the first phase of the Sino-US economic and trade agreement.
Affected by the latter two factors, the implementation of the china-US phase one economic and trade agreement to expand trade flows is not optimistic. Judging from the latest trade data released by China and the United States, under the background of the slow recovery of US production capacity and the re-heating up of the Sino-US game, it is difficult for the two sides to fully fulfill the specific goal of expanding the flow of trade in goods in accordance with the assumptions of the first phase of the economic and trade agreement (as detailed in Table 2).
(3) Evaluation of the implementation effect of the first phase of the Sino-US economic and trade agreement
The first phase of the Sino-US economic and trade agreement and its implementation are an important starting point for the Biden administration's trade policy toward China. In terms of its short-term impact, the signing of the agreement has temporarily eased and stabilized Sino-US economic and trade relations, and the practical difficulties encountered in the implementation process require new consultations and coordination between China and the United States, and the final implementation of the agreement also provides a basis and basis for the Biden administration to establish a trade policy with China and the next round of Sino-US trade negotiations.
First, the signing of the first phase of the Sino-US economic and trade agreement temporarily eased the tense Sino-US economic and trade relations. In March 2018, the Trump administration launched the so-called "301 Investigation" report on China, and accordingly announced that it would impose a 25% tariff on $50 billion worth of goods imported from China, provoking a Sino-US tariff dispute. After several rounds of tariff escalation, as of the signing of the first phase of the Sino-US economic and trade agreement, the punitive tariffs imposed by China and the United States have covered 66.7% of China's exports to the United States and 58.3% of us exports to China, and the average tariff rate levied by China and the United States has risen sharply from 3.1% and 8.4% before the dispute to more than 20%. Although the signing of the agreement did not make China and the United States abandon the imposition of punitive tariffs, it has largely avoided the further escalation of tensions in Sino-US economic and trade relations, which is not only conducive to the effective management of differences between China and the United States in the economic and trade fields, but also conducive to stabilizing global market confidence, and alleviating the huge impact of sino-US tariff disputes on bilateral economic and trade relations in the short term.
Second, the practical difficulties encountered in the implementation of the first phase of the Sino-US economic and trade agreement have made it necessary for China and the United States to conduct new discussions and consultations on the implementation of the agreement. Specifically, due to uncertainties such as the COVID-19 pandemic, the implementation of the phase one economic and trade agreement between China and the United States is facing great challenges, especially the difficulty of achieving the growth target of trade flows in manufactured goods and energy commodities. In the agreement, the United States made a commitment to "ensure that appropriate measures are taken so that there are enough U.S. goods and services for China to purchase and import," and the Two Sides agreed that if one party is unable to fulfill its obligations under the agreement in a timely manner due to unforeseen circumstances, the two sides should conduct further consultations. Therefore, in the face of multiple difficulties in implementing the agreement, it is difficult for the Biden administration to continue to use the original agreement objectives as a basis for measuring the performance of the two sides. Assessing the implementation of the first phase of the Sino-US economic and trade agreement and consulting with China on the implementation of the agreement have become important topics in the Biden administration's economic and trade interaction with China.
Finally, the final implementation of the first phase of the Sino-US economic and trade agreement provides a reference and basis for a new round of Sino-US trade negotiations and the Biden administration's formulation of trade policies toward China. Specifically, the first phase of the Sino-US economic and trade agreement is a temporary agreement, which only solves the partial problems in the trade between the two countries from the perspective of policies and operational procedures, and does not fundamentally solve the structural contradictions that affect the normal development of economic and trade relations between the two countries. The Biden administration will add more U.S. concerns to the new round of Sino-US economic and trade negotiations, and its trade policy toward China will also focus on the new round of Sino-US trade talks to some extent.
The biden administration's basic propositions on China's trade policy
From Biden's campaign promises in the 2020 election, to his trade policy toward China since he took office in early 2021, to his first vision of U.S. trade policy toward China in October 2021, the biden administration's basic ideas on china's trade policy have taken shape. The Biden administration does not deny that there are competitive elements in the U.S.-China trade relationship, but differs from the Trump administration in its choice of policy guidelines and policy tools.
(1) Relevant commitments of the Biden administration
At least six of the 46 major campaign promises Biden announced during the 2020 election are closely related to trade issues with China, covering multiple areas such as global economic governance, manufacturing repatriation, technological innovation, climate and energy, and U.S. labor rights (details shown in Table 3). Compared with the Trump administration, although the Biden administration has not reduced its emphasis on Sino-US trade issues, it has adjusted its specific trade policy propositions.
In terms of similarities, Biden repeatedly mentioned China in his campaign, and regarded China as an important competitor of the United States in the economic and trade field in issues such as "Made in the United States", "American innovation" and "restoration of American leadership". Judging from the policy propositions reflected in the campaign promises, although the Biden administration does not directly emphasize "America First", it still maintains a tough stance and interest appeal to China through various channels on the grounds of safeguarding "fair trade" and US "national security".
In terms of differences, the Biden administration's trade policy proposals toward China in the campaign differ from those of the Trump administration in three ways. First, the Biden administration does not pay much attention to the trade balance, does not take the reduction of the US-China trade deficit as the main policy goal, but pays more attention to the impact of Sino-US trade on issues such as domestic employment and innovation in the United States; second, unlike the Trump administration's weakening of the multilateral trading system and emphasis on unilateral pressure on China, the Biden administration is more inclined to call on and win over allies and use the global and regional multilateral trading system to isolate China on trade issues; third, in the field of energy trade, different from the Trump administration's emphasis on traditional energy. Instead of emphasizing China's imports of traditional U.S. energy, the Biden administration is trying to capitalize on climate change issues, emphasizing the use of clean energy and raising environmental standards to break down green trade barriers.
(2) The Biden administration's trade policy with China since he came to power
Judging from the policy performance since its official inauguration in January 2021, the Biden administration's trade policy toward China is basically in line with its campaign promises, and while continuing the Trump administration's punitive tariffs, it has begun to use the chaos of the new crown epidemic to strengthen the protection of the US supply chain.
First, after the Biden administration took office, it continued the tone of the Trump administration's trade policy toward China, and the confrontation between China and the United States in the field of trade has not eased. On the one hand, the Biden administration has continued the Trump administration's strategic positioning toward China, whether it is the Innovation and Competition Act 2021, which is composed of the Strategic Competition Act of 2021, the Response to China Challenge Act, the Endless Frontier Act, or the executive order signed by Biden to "respond to the threat of Chinese military enterprises", it continues to regard China as a major competitor of the United States. On the other hand, from the perspective of the use of policy tools, the Biden administration has not eliminated the punitive tariffs imposed by the United States on China, but continues to use tariff barriers as an important tool for trade policy with China. Specifically, Biden not only made it clear during the campaign that he would not immediately remove tariffs on Chinese goods, but since his inauguration, the average tariff rate imposed by the United States on Chinese imports has remained at a high level of 19.3%.
Second, the COVID-19 pandemic has created greater uncertainty about U.S. trade policy toward China. The Biden administration has taken the elimination of the impact of the epidemic as a breakthrough and paid more attention to supply chain security issues. Biden proposed a "Supply Chain Recovery Strategy" in his "Sustainable Public Health Supply Chain" executive order, requiring the U.S. Department of Defense, the Department of Health and Human Services, and the Department of Homeland Security to work with the President's National Security Adviser, the President's Domestic Policy Assistant, the Special Coordinator for COVID-19 and other administrative agencies and relevant responsible persons to jointly formulate a complete plan to strengthen the resilience of the US supply chain and comprehensively reduce the dependence of the United States on overseas supply chains. The impact of the COVID-19 epidemic on supply chain security will undoubtedly accelerate the pace of localization of the US industrial chain.
Third, the Biden administration insists on protecting "Made in america" policies and tries to squeeze China out of the U.S.-centric industrial chain. Based on the domestic demand of "Made in the United States", the Biden administration is adopting a series of support and investment policies to promote the "return of manufacturing" and maintain the absolute advantage of the United States in the high-tech industry through administrative intervention and legislative protection. Since Biden took office, he has signed a number of executive orders such as "Ensuring that U.S. Products Are Made by American Workers" and "U.S. Supply Chain", which not only impose stricter restrictions on "Made in the United States" products, but also require all government departments to cooperate with the President's National Security Adviser and the President's Economic Policy Adviser to focus on reviewing supply chain risks in four key areas: drugs and APIs, key minerals, large-capacity batteries, and semiconductors, and to address the supply chain risks in defense, public health, information technology, energy, and energy within one year. The industrial chain of related products in the six major fields of transportation and agriculture will be reviewed in a key manner. Affected by this, the existing trade cooperation between China and the United States based on their respective comparative advantages, especially in some key and core areas, will be impacted.
(3) Prospects for the Biden administration's trade policy toward China
In October 2021, U.S. Trade Representative Dai Qi delivered a speech titled "New Approach to the U.S.-China Trade Relationship" around the Biden administration's trade policy toward China, which is considered the general guidelines of the Biden administration's trade policy toward China. Although Dai Qi proposed the new concept of "re-linkage" in her speech and acknowledged to a certain extent that there is an interdependent economic and trade relationship between China and the United States, in terms of the main content of the speech, the Biden administration's trade policy on China is not a complete overthrow of the Trump administration's China policy, but revolves around three issues.
First, in the U.S.-China trade relationship, the Core concerns of the Biden administration remain the so-called "fairness" issue. Dai Qi began his speech by labeling China as "non-compliance with international trade rules," accusing "China of long-standing non-compliance with international trade rules that has affected the prosperity of the United States and other countries." At the end of the speech, Dai Qi summed up the historical evolution of economic and trade relations between china and the United States since the establishment of diplomatic relations in the 1970s, and blamed the decline in the competitiveness of American enterprises on China's "unfair competition." From this point of view, the basic proposition of the Biden administration's trade policy toward China is still based on the concept of "fair trade" that ignores the development stages and industrial structure differences between the two sides, and its core goal is to consolidate and maintain the competitive advantage of the United States itself.
Second, the Biden administration will conduct new negotiations and consultations with China in accordance with the implementation of the first phase of the Sino-US economic and trade agreement. In elaborating on the Biden administration's vision of trade policy toward China, Dai Qi proposed that "the implementation of the first phase of the Sino-US economic and trade agreement will be discussed with China" and that a "targeted tariff exemption mechanism" will be launched as appropriate to ensure that the implementation of the existing agreement is more in line with the economic interests of the United States. Dai Qi also said that the Sino-US phase one economic and trade agreement and the Trump administration's approach to Sino-US trade issues have not addressed the fundamental concerns of the United States, and the Biden administration will seek to reach a new and deeper trade deal with China while abandoning the Trump administration's unfinished negotiations on the second phase of the Sino-US agreement. It can be seen that the starting point of the Biden administration's trade policy toward China is still based on the existing results of the first phase of the economic and trade agreement.
Third, the Biden administration will use more diverse tools for trade policy toward China. In his speech, Dai said the Biden administration seeks to approach economic and trade relations with China in a "new, comprehensive, and pragmatic" way, will unite allies to set "fair" rules for international trade, and "make full use of all existing policy tools and develop new ones as needed" to protect U.S. economic interests from harm. Although Dai Qi did not specify the relevant policy tools, it is conceivable that in addition to the punitive tariffs imposed by the Trump administration, the Biden administration may also use so-called "new tools" such as non-tariff barriers and US-led multilateral and regional trade rules to pressure China.
The economic fundamentals of the Biden administration's trade policy toward China
In order to comprehensively assess and predict the Biden administration's trade policy toward China, in addition to starting from the starting point of its policy, "listening to its words and watching its deeds", it is also necessary to analyze the fundamentals of Sino-US trade relations. Judging from the current situation of Sino-US competition and cooperation, the economic interests of the two sides are both conflicting and confrontational, as well as complementary and cooperative, and "centrifugal force" and "centripetal force" coexist.
(1) The measurement of "centripetal force" and "centrifugal force" in Sino-US trade relations
In the existing literature, it is not uncommon for research to focus on and measure the competitiveness and complementarity of the trade relationship between China and the United States, but the relevant research is often analyzed from the perspective of a single industry or industry. For example, some scholars have analyzed the complementary relationship between China and the United States in terms of service trade through the indicative comparative advantage index and trade competitiveness index of service trade between the two countries. Some scholars have studied the evolution of the complementary relationship between Sino-US agricultural products from 1996 to 2010 through indicators such as the Sino-US Agricultural Trade Combination Index, the Gruber-Lloyd Index, and the Export Product Similarity Index. On the basis of summarizing the trade characteristics of The Creative Industries between China and the United States, some scholars have compared the international competitiveness of the creative industries of China and the United States by examining the export similarity and trade competitiveness index of creative products and creative services. On the basis of summarizing and drawing on the above research methods, this paper measures the complementarity and competition of different industries between China and the United States through three indicators: trade combination index, Gruber-Lloyd index and bilateral export product similarity index, and finally derives the "centripetal force" and "centrifugal force" in the overall trade relations between the two sides.
1. The degree of trade integration between China and the United States in different industries
In view of the degree of interdependence between China and the United States, this paper uses the Trade Combination Index (TII Index) to calculate. The Trade Association Index was developed by the American economist A. Brown. J. Brown) proposed that it refers to the ratio of a country's exports to a trading partner as a proportion of that country's total exports to that country's total exports as a proportion of that country's total world imports, and the larger the value of this indicator, the higher the trade dependence between the two countries.
2. U.S.-China trade patterns in different industries
For the trade patterns of different industries in China and the United States, this paper uses the Gruber-Lloyd Intra-Industry Trade Index (GL Index) for calculation. The Gruber-Lloyd Index, a central indicator of intra-industry trade, was proposed in 1971 by Herb Grubel and Peter Lloyd to accurately reflect changes in the level of intra-industry trade by distinguishing all trade flows from intra-industry trade and inter-industry trade.
3. The similarity of exports between different industries in China and the United States
In view of the competitive relationship between different industries in China and the United States, this paper uses the bilateral export product similarity index (ESI index) to calculate. The similarity index of bilateral exports was first developed by J. Finge. M. Finger) and M. Krinen E. Kreinin) proposed that the index is used to measure the similarity of the products exported by any two countries on the world market and is an important indicator of the degree of competition in the export products of the two countries.
4. Data description
The import and export data used in this article are from the United Nations Merchandise Trade Statistics Database (UN Comtrade), which is used over the period from 2017 to 2020. The specific industry and product classifications use the Harmonized System (HS).
(2) Analysis of the "centripetal force" in Sino-US trade relations
Judging from the calculation results of the trade combination index, the Gruber-Lloyd index and the bilateral export product similarity index, the trade relationship between China and the United States that is interdependent and complementary has not undergone qualitative changes, and the "centripetal force" of the trade relationship between the two sides is mainly reflected in three aspects.
First, China and the United States have closer trade ties in most industries. According to estimates, of the 80 types of manufacturing industries divided by the top two HS codes, 53 types of trade combination indexes are above 1, indicating that the two sides have close trade ties in nearly 70% of the industries. Among them, it includes both the traditional manufacturing industry represented by the textile industry and the high-tech industries such as aerospace, electronic communications, and biomedicine. It can be seen that for now, the economic and trade relations between the two major economies of China and the United States have not undergone fundamental changes, and China and the United States still have the economic basis for cooperation during the Biden administration.
Second, the distribution of sino-US economic and trade cooperation models at the industrial level is balanced, and the proportion of inter-industry trade is rising. By measuring the GL index of different industries, it can be found that when China and the United States divide industries according to the top two HS codes, 65% of them are mainly trade in the industry, and on the basis of the overall distribution, the proportion of trade in the industry has exceeded the trade between industries. This phenomenon shows that in Sino-US trade relations, there is not only one-way trade flow based on their respective resource endowments and production advantages, but also based on the upstream and downstream division of labor in the industrial chain, supply chain and value chain, and the forms of economic and trade cooperation between the two sides are rich and diverse and balanced. The existence of a large amount of trade between industries, especially shows that the gains of China and the United States in the trade relationship cannot be measured only by the trade balance, and the large transfer of low value-added production links by the United States through the global value chain is the root cause of the large trade difference between China and the United States.
Third, there are large differences in the competition and complementary relationship between China and the United States in different industries, and the number of industries with stronger competition is generally limited. It is estimated that in the four years from 2017 to 2020, although the similarity of products between China and the United States in some technology and capital-intensive industries continued to rise, the similarity of export products between the two sides remained stable as a whole, and even a slight decline of 6.3%. China and the United States not only have a weaker competitive relationship and strong complementarity in labor- and resource-intensive industries such as agriculture, textile industry, and nonferrous metallurgical industry, but also have a low degree of competition in some technology- and capital-intensive industries such as railways, ships, and aerospace. It can be seen that the overall situation of intensified Sino-US competition is not manifested in all industries, and the complementary relationship between the two countries in some industries still provides a "centripetal force" for Sino-US trade relations.
(3) Analysis of "centrifugal forces" in Sino-US trade relations
Although as far as the overall trade relationship between China and the United States is concerned, the "centripetal force" of interdependence and complementary advantages still exists, the fact that the "centrifugal force" of the two sides has risen in some industries cannot be ignored. Especially with the advancement of China's technological progress and industrial transformation and upgrading, the competitiveness of China and the United States in some technology and capital-intensive industries has risen rapidly. Because these industries are often the key and core industries for the United States to maintain its competitive advantage, this part of the "centrifugal force" in the Sino-US trade relationship has been increasingly valued by the US government.
In terms of calculation results, the industries with high or rising export similarities between China and the United States are the most competitive industries in the two countries and the industries that generate the most "centrifugal force" (as detailed in Table 4). In such industries, in addition to the traditional manufacturing of automobiles and steel, it also includes technology-intensive and capital-intensive high-tech industries such as mechanical appliances, electrical equipment, precision instruments, and medical equipment. This phenomenon fully shows that with China's rising position in the global industrial chain and value chain, the more competitive industries in China and the United States have extended from traditional manufacturing to high-tech industries. In addition to the competitive factors that have always existed in the traditional manufacturing sector, the trade relationship between China and the United States also needs to face more newly generated "centrifugal forces" from the high-tech sector.
IV. Conclusion
Combined with the biden administration's policy starting point, policy propositions and the economic fundamentals of the current Sino-US trade relationship where "centrifugal force" and "centripetal force" coexist, the Biden administration will most likely continue the overall trend of the United States strengthening strategic competition with China, but may adopt a more focused and flexible strategy in the specific trade policy focus and policy tools.
First of all, from the overall trend point of view, the Biden administration will not easily change the main tone of the US trade policy of containing and suppressing China. Under the reality that the "centrifugal force" and "centripetal force" of Sino-US trade relations have coexisted for a long time, China and the United States can neither completely get rid of their dependence on each other nor completely return to the former "honeymoon period". The so-called "re-linkage" and "launch of targeted tariff exemptions" proposed by the Biden administration are more out of consideration for the us own economic interests and are technical corrections to the Trump administration's extreme trade policies, rather than a fundamental adjustment to the US trade policy toward China. Especially in the context of the new round of scientific and technological revolution and industrial change, which has profoundly affected and changed the global innovation map and economic pattern, the current competition between China and the United States in the field of trade has risen to the "future dispute" and "road dispute" in the eyes of the United States. In addition to economic factors, the Biden administration will also look at the Sino-US trade relationship from the perspective of politics and national security. Therefore, in the process of formulating trade policy toward China, the Biden administration will consider more about the relative gains between China and the United States than the absolute gains of the United States itself, and the role of the "ballast stone" of Sino-US trade relations will be weakened.
Second, from the perspective of policy focus, the Biden administration's trade policy pays more attention to the so-called "interests of the American middle class" and places more emphasis on the "American worker-centered" trade policy toward China. "Revitalizing the American middle class" is the foothold of the Biden administration's domestic and foreign economic policies, and the Biden administration's trade policy toward China will also be laid out around the core of its policy. The Biden administration emphasized that "people are not only consumers, but also workers and workers," arguing that trade policy should focus on how to raise wages in the United States and create high-paying jobs, rather than just considering the interests of multinational corporations. In her speech on the vision of trade policy toward China, Dai Qi mentioned "American workers" as many as 15 times, arguing that Sino-US trade relations should create higher wages and more jobs for American workers. This means that the Biden administration will not only consider the overall consumer welfare of China and the United States based on the division of labor based on comparative advantage, but also plan the trade relationship between China and the United States on the production side. As a result, the Biden administration will pay less attention to the superficiality of the U.S.-China trade balance, but will place more emphasis on the impact of U.S.-China trade relations on domestic U.S. economic issues such as employment and industrial development. Especially in the context of the severe impact of the new crown epidemic on the US economy, the focus of the Biden administration's trade policy toward China will serve the overall situation of promoting the RECOVERY of the US economy. Therefore, in the future trade negotiations between China and the United States, compared with agricultural products, energy and other issues that accounted for a large proportion of the first phase of the economic and trade agreement, the Biden administration may pay more attention to the manufacturing industry that has been more seriously affected by the epidemic.
Finally, in terms of policy tools, the Biden administration is likely to use tariff tools less and more non-tariff barriers such as supply chain reviews and use the system of allies and trade rules to pressure China. Although the Biden administration has said it will "make full use of all the existing policy tools," the use of tariff tools has been limited because most of the tariffs imposed on China are ultimately borne by U.S. consumers. Under the pressure of domestic inflation in the United States, the Biden administration announced a list of 549 products on October 5, 2021, formally soliciting opinions on whether to resume the tariff exclusion process, and the United States is likely to officially promote the launch of the tariff exclusion procedure at the end of 2021. The Biden administration will continue to use the COVID-19 response to conduct stricter supply chain scrutiny in the context of maintaining national security. At the same time, non-tariff barriers such as environmental protection and labor rights are used to adopt a more flexible and precise industrial chain "decoupling" for the core industries competing between China and the United States. The Biden administration will also further adjust the Trump administration's all-round trade protection policy that is too large to crack down, exerting the "international leadership" of the United States by repairing and strengthening relations with traditional U.S. allies, and excluding China from the U.S.-led global and regional trading system.
In the face of the "old themes" and "new changes" of the Biden administration's trade policy toward China, in addition to doing its own thing, China should also "prescribe the right medicine" according to the economic fundamentals of Sino-US trade relations and the characteristics of the Biden administration's trade policy toward China. Specifically, one is to strengthen the construction of the domestic large market by building a new development pattern of "double circulation", hedge the uncertainty of Sino-US trade relations with the certainty of its own economic development, and be prepared to deal with the rising competitive factors of Sino-US trade relations in the long run; second, we can take the initiative to maintain and deepen the interdependence of China and the United States in the global industrial chain and value chain, global rule system, and global governance actions, not easily "weaponize" this interdependence, and make full use of the "centripetal force" to stabilize Sino-US trade relations Third, we can actively participate in global economic governance, promote the reform of international economic and trade rules, and strive to resolve the Biden administration's attempt to isolate China through deep participation in global cooperation.
*Disclaimer: This article only represents the personal views of the author and does not represent the position of this official account
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