Deeds don't match Washington's word
By China Daily Global Updated: 2019-10-22
The US boasts free competition and enterprise as its cornerstone, but has forgotten all about independence, fair play and competition
A market economy is the most dynamic economic system, as it allows market entities to exercise their freedom of choice in their decisions to invest, produce, operate and consume, as promoting effective resource allocation through endogenously competitive transactions on an equal footing.
The United States is a global superpower that has benefited from having a market economy. Zhong Sheng, a commentator at People's Daily, argued in an editorial in June 2019 that it was the pursuit of a free market that helped the US stand out in the historical formation of the global market, and a commitment to fair competition was a fundamental value that the US proudly espouses.
China's growth story over the past 40 years also owes its success to the introduction of market competition mechanisms that have allowed market forces to play a fundamental role in the allocation of resources. From 1978 onward, the Chinese government made the right choice in driving market reform to build a socialist market economy through the reform and opening-up policy, which China has continued to advance. Effective resource allocation and competitive markets have come as a result.
However, Washington is now acting like a bully to constrain the "invisible hand" of market forces, all for its own benefit. The US government has been launching arbitrary attacks on the international division of labor, which is a natural result of globalization, and on market competition, which is a natural consequence of free trade.
Unfortunately, the US government and some of its politicians, brand the country as a market economy with "free competition" and claim free enterprise as the cornerstone of the market economy, but have already forgotten about the laws of a market economy, which are independence, fair play and competition. They have turned their back on the rules of fair competition in the name of "America First" and "Make America Great Again". They abuse tariffs and erect trade barriers in an attempt to quash other countries' trade activities.
The US government and some politicians call the US a free market economy while at the same time turning a blind eye to China's achievements over the past 40 years. They manipulate other Western countries into denying China's market economy status, hamstring international competition in free trade by hook or by crook, and trample on the rules of a market economy which are based on openness, fairness and cooperation.
All of these expose the double standard in US behavior in market economy and international trade: The US only respects the rules if they serve its interests; rules that do not are simply ignored.
Respect for contracts is another cornerstone of a market economy. Without interrelated and interdependent market integrity and respect for contracts, competition will become disorder and chaos. In a market economy, particularly one with in-depth integration between the global value chain, industry chain and supply chain, credibility and staying true to one's word are the foundation of effective and orderly interaction between market entities, both horizontally and vertically.
The US has always branded itself as a country that stays true to its word, regarding integrity as synonymous with US value, as seen in this popular anecdote from over two centuries ago. A couple who had fallen on hard times decided to sell a piece of land on which their five-year-old had been buried, but with the condition that a contract be signed to preserve the grave.
In 1896, the piece of land was chosen as the site of the graveyard of the 18th president of the Unite States, Ulysses S. Grant. According to the agreement, the child's grave would still have a place in the presidential graveyard, as permanent company to Grant.
The Amiable Child Memorial was a legend in the US history for over 200 years, and is regarded as a symbol of the US value of keeping promises.
Is the US staying true to this value nowadays? Can the US government be considered true to its word when it denies or walks back on the things it agreed to in negotiations with its Chinese counterpart? Can US multinationals be considered paragons of integrity when they readily walk away from business agreements with Chinese manufacturers or stop supplying parts and communication technologies and software the second an executive order tells them to do so?
There is no denying that all these behaviors go against the principle of integrity, disrupt the rule of law and distort fair competition. Some international media outlets have pointed out that the US shows a complete lack of integrity when dealing with other countries. Its arbitrary breaches of contract and agreements show that it only enters into such things to control what others can do. What the US government, some US politicians and companies are doing is highly unethical; instead of abiding by their word, they act as if integrity does not matter at all.
As the US is the only global superpower, other countries expect it to be a force for good in building and abiding by the rules of the international market economy, in respecting and safeguarding international trade rules, and in steering the global economy and the international economic order to develop in a positive direction.
Trade protectionism and unilateralism are at odds with the overarching trends of economic globalization and development through open and inclusive cooperation. What the US government is doing goes against the direction of the modern market economy and economic globalization. It will do nothing to promote the long-term prosperity of the US economy nor bring about benefits to the US people; rather, it will only dampen the prospects of global economic growth, disrupt the world economic order and damage the global value chain, industry chain and supply chain, hindering the coordinated development of the global economy.
If the US government continues along this path, it should probably look no further than the aftermath of Hoover administration's protectionist campaigns, which drove the world economy into a profound crisis in the 1930s.
It is a good sign that Washington has shown the intention to conclude a deal with Beijing recently. But we still need to wait and see whether it will keep its word and bring Sino-US relations back onto right track.
The author is vice-chairman of China Center for International Economic Exchanges. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.