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Guest commentary by Zhao Jinping
Since Donald Trump took office as president of the United States, both international and Chinese media have published stories about a possible trade war between the world's two largest economies.
However the truth is that both countries need to work together, not only for their own interests but for the benefit of the world.
As the world's biggest economy, the US has long played the leading role in the growth of the global economy. Prior to the 2008 financial crisis, the US had been the largest single contributor to global economic growth.
As the US economy sank into a period of profound adjustment following the crisis, China's economy kept up a steady pace of growth which has seen its share increasing dramatically in the world economy.
Now China is contributing more than 25 percent to the growth of the world economy and surpassed the US to become the most powerful engine for the slowly recovering world economy.
Currently, the world economy is still sluggish and suffers from slow demand in the international market. As a developing country, however, China still lags behind the US in terms of economic strength and despite its size can exert no more than a limited influence in the prospects of the world economy.
Therefore, an effective boost to the global economic performance will not be possible without the combined thrust of the twin engines of China and the US, as well as the concerted efforts of all the world's major countries.
The twin engines of China and the US propel the world economy. /VCG Photo.
China-US participation essential to improve the governance of world economy
The existing governance structure of the world economy is ill-equipped for the rise of emerging economies, leading to violent market fluctuations, demoralized investors and disoriented market expectations caused by a lack of coordination among the macro-economic policies of various countries.
This highlights the urgency and importance of further improving the global governance system. In spite of some recent positive progress, such as the birth of fresh policy communication and coordination mechanism like the G20, there is still much to be done before the goals announced at last year's G20 summit can be achieved.
The US and China account for nearly 40 percent of the world economy, and their participation is essential in improving the governance of the world economy. With its abundant experiences in global governance and rule-making, the US will serve as a substantial guarantee for the steady and orderly advancement in the structural reform.
On the other hand, China’s participation will offer a balancing force in structural reform effort and provide a more comprehensive reflection of the shifting demands in the new era. China-US cooperation in this regard is bound to produce more concrete results in building and perfecting the world economic system.
An international trade environment of free competition conforms to the interests of both China and the US
Both China and the US are major beneficiaries of global trade and the long-term expansion of global investment, and both have been the champions and practitioners of a fair, free and competitive international trade environment.
As protectionism and anti-globalization are rearing their ugly heads, both countries cannot ignore the fundamental importance of safeguarding the multilateral mechanism of the World Trade Organization. This is also the demand and expectation of the firms and citizens in both countries.
Since China's WTO accession, the speed of the growth of the US’s trade to China has outstripped the US’s trade to the world at large by more than five times. It certainly has had a positive effect on the employment and economic growth of the US. Likewise, the sustained growth of investments between China and the US has brought about tangible benefits to people in both countries.
Therefore, it is in the interest of the US as well as China to strengthen economic and trade cooperation and maintain a free and fair investment environment. It is urgent that they should expedite the implementation of the consensus reached by the leaders of China and US and carry out the 100 Day Plan.
Zhao Jinping, Director-General of the Research Department of Foreign Economic Relations, Development Research Center of the State Council (DRC). This article is a summary of the keynote speech by Mr. Zhao at a China-US think thank seminar in New York on June 14. The article reflects the author's opinions and not necessarily the views of CGTN.
(CGTN)
