Thomas J. Donohue Thomas J. Donohue
Advisor and Former Chief Executive Officer, U.S. Chamber of Commerce


May 01, 2018


We’ve all heard the old Chinese blessing – or is it a curse? – “May you live in interesting times.” This is certainly an interesting – and turbulent – time for the U.S.-China relationship.

There’s a vigorous debate about its future at the highest levels of government, and increasingly, among the American people. There are wide and varying viewpoints. So let me state what I think most of us can agree on.

First, the trade relationship – while far from perfect – has delivered substantial economic benefits to our economy, our businesses, and American consumers. Trade with China supports vast numbers of U.S. jobs, and China’s growing consumer market is critically important to U.S. exporters and investors. Most businesses would agree that, under the right conditions, the economic opportunities for American businesses in China are boundless.

Second, despite these manifest economic benefits, there are serious, growing, and legitimate challenges regarding a range of Chinese government policies and practices. They include measures that restrict access to China’s market, force technology transfer as a condition of competing, and broadly seek to undermine the value of intellectual property.

It’s not just Americans who are complaining: These concerns have been echoed by stakeholders from around the world, including members of the EU, Japan, Korea, and others.

Let me be clear: no one is afraid of fair competition from China. No one is afraid of a Chinese company succeeding on the global stage if that company isn’t playing with a stacked deck. What American business and the U.S. government are concerned about is state capitalism, and how it tilts the playing field and distorts markets around the world.

It’s problematic for China to employ significant state support for industries and to restrict competition from foreign companies in its domestic market while it enjoys better access and better treatment in foreign markets. This situation undermines the full potential of the bilateral relationship, and it is increasingly eroding its foundation.

Put simply, it’s just not sustainable, and, ultimately, it’s not in China’s long-term interests.

Let me underscore this last point: Building non-competitive industries is bad policy and bad business, and it has no place in fair global commerce. It is ultimately self-defeating.

Now would be an excellent time for China to move forward aggressively on significant, systemic reforms that produce a truly level playing field. A senior U.S. government delegation will raise these issues later in the week in Beijing.

Third, we are deeply concerned that the tariffs on imports from China proposed by the United States – and the risk of these tariff threats escalating even further – will not effectively advance our shared goal of changing these harmful Chinese practices. Tariffs are hidden, regressive taxes that will be paid by U.S. businesses and consumers in the form of higher product prices.

We need the administration instead to work collectively with U.S. industry, Congress, and our trading partners to adequately address China’s unfair trade practices in ways that maximize the likelihood of real, enforceable solutions – and without inflicting collateral damage on businesses and consumers.

Finally, a respectful and mutually beneficial relationship between the United States and China is good for the world. The United States and China constitute 40% of global the global economy. We are the two most powerful and influential countries on the planet. We share global responsibilities to foster peace, prosperity, and stability.

The whole of our relationship is not just trade and investment. We can and should take steps now to enhance commercial cooperation in sectors that are vital to both of our economies, such as agriculture, healthcare, and an efficient global transportation system.

Having said all of that, no one here is naïve enough to believe that China and the United States are going to stop competing for resources, talent, and market access around the world. Nor will either country stop advancing its ideas about the best economic model and form of government.

My bottom line on China is simple: Compete we will, but cooperate we must. We will do so not only for the good of our respective peoples, but for the benefit and welfare of the entire world.

About the authors

Thomas J. Donohue

Thomas J. Donohue

Thomas J. Donohue is advisor and former chief executive officer of the U.S. Chamber of Commerce.

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