Expert: Chinese, US economies highly integrated with each other

Fair and equality-based negotiations for mutual benefit and with mutual respect should be the basis for solving trade disputes between China and the United States, said a senior expert.

In an exclusive interview with China Daily, Zhu Guangyao, former vice-minister of finance, said Sino-US economic and trade relations not only matter for the two nations themselves, but also for the rest of the world. A trade war between them is undesirable for all.

The two countries announced a series of tariff adjustment measures aimed at easing trade tensions on Monday, after a two-day high-level meeting on economic and trade affairs in Switzerland, according to a joint statement issued by both governments in Geneva.

READ MORE: China, US agree to de-escalate trade tensions

The meeting was held between Chinese Vice-Premier He Lifeng and US Treasury Secretary Scott Bessent.

The US economy and the Chinese economy are highly integrated with each other, but high tariffs have made trade between the two countries reach a very difficult situation, which is bad for everyone, Zhu said.

Zhu said the US wants to use tariffs to reshore manufacturing, as it believes manufacturing outflow is bad. Yet, that is just a "one-sided assessment", and the US actually benefits a lot from globalization.

He agreed that the US trade deficit is in nature associated with the dollar's strong position in the international trade and financial systems. It is impossible for the US to seek a trade balance while trying to maintain a strong position of the US dollar.

"We should see a comprehensive analysis of the balance of payments, not only trade flows, but also financial flows," he said, adding that the US greatly benefits from capital flows into the country, and that has allowed the US to take advantage of globalization for many years.

Returning to talks is important for China, for the US, and for global peace and development, Zhu said.

Since the US announced its so-called "reciprocal tariffs" on China and many other countries in April, China has taken firm countermeasures to protect its legitimate rights and firmly opposes the US abuse of tariffs.

Zhu said the moves protect China's own interests, and more importantly, the rule-based global trade system with the WTO at the center.

He added that China's development in high-tech industries, including artificial intelligence, tells the world how hard Chinese people work and the positive results China has achieved.

"Domestically, we must have this strong economic stimulus program and maintain the sustainable development of the Chinese economy, and not be affected by big external uncertainties. China is capable of enhancing research and development and realizing self-reliance," Zhu said.

"Some US companies have already recognized this trend. The only right way for (the US) is back to real communication-based mutual respect and win-win cooperation (with China)."

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China's decision to engage in talks with the US reflects China's profound sense of responsibility, and demonstrates its strategic determination to not compromise on principle issues, said Ying Pinguang, professor at Shanghai University of International Business and Economics.

Meanwhile, a forecast by S&P Global said tariff-induced price shocks would raise US core consumer prices to 4 percent by the end of this year.

The International Monetary Fund, in its latest "World Economic Outlook" report released last month, cut its 2025 projections for the global and US economies by 0.5 percentage point and 0.9 percentage point, respectively, from its January forecasts.

The IMF said in the report that "the swift escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a significant impact on global economic activity".

Contact the writers at zhuwenqian@chinadaily.com.cn