Could trade war be China’s golden opportunity to transform economy and society?

11-Jul-2019 Intellasia | South China Morning Post | 6:02 AM Print This Post

A former Japanese prime minister has urged China to draw on his own country’s experience and use the trade war as an opportunity to transform its economy and society.

Yasuo Fukuda, who served as Japan’s leader from 2007 to 2008, said there were clear similarities between China’s current problems and US-Japan economic tensions which began in the 1950s and continued for decades.

“I believe China should not regard itself as a victim in its trade relations with the US. On the contrary, China should take this difficult time as a national chance to solve problems and find new engines to a continuous economic growth,” he said.

At the opening session of a two-day Sino-US trade relations forum in Hong Kong, Fukuda spent more than half of his keynote speech recalling Japan’s past, painful experiences in negotiating with the US and said the talks had turned out to be a “golden chance” for change.

 (South China Morning Post)

(South China Morning Post)

“Japan does have considerable understanding of today’s relations between the US and China, simply because we had similar trade frictions with the US for decades to what China has today,” Fukuda said.

“I can state with confidence that the bilateral talks with the US provided a golden chance to transform Japanese society. Of course, it’s a very tough decision-making process,” he said, adding that Beijing should objectively assess these experiences since Japan had by no means been perfect in the past.

“We sat with the US in great pain, but it’s a fact that we made much significant progress… through those negotiations, we internationalised Japanese companies and societies… Japan became a modern Asian state.”

The US-Japan experience

Economic tensions between the US and Japan began in the 1950s over textiles, extended to synthetic fibres and steel in the 1960s and escalated from the 1970s to 1990s to colour televisions, cars and semiconductors, as Japan’s industrial policies and technological development moved it up the industrial chain.

When Japan’s semiconductor industry boosted by government support surpassed the US to become the world’s largest chip supplier in the early 1980s, Washington accused Tokyo of state-sponsored industrial policies, intellectual property theft from US companies, and product dumping.

Today, China and the US are working to re-establish a dialogue to resolve their trade differences, following a meeting between Chinese President Xi Jinping and his US counterpart Donald Trump on the sidelines of the Osaka G20 last month.

The bitter trade war between the two countries which began early last year has broadened from tit-for-tat tariffs to include accusations of intellectual property theft and US efforts to extend its regulation of key Chinese industrial technology sectors.

“The problems China is facing today are very similar to those of Japan in those eras, when Japan was criticised as a bureaucratic state,” Fukuda said.

High-level attendees at the event included former Chinese vice-premier Zeng Peiyan and other previous government heads and officials, as well as entrepreneurs and scholars from around the world.

Fukuda also took the opportunity in his address to urge China to seriously consider what role it wanted to play on the world stage, describing it as “the most serious issue of the era that we are faced with”.

“China 10 years ago did not play such an important role like today. Each step China takes not only affects relations between the United States and China, but also the entire world,” he said.



Category: China

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