Cooperation for a better world
China and the US have a shared obligation to work together to promote global development
According to a report released by Fortune on Aug 28, "Tesla Motors has emerged as the leading seller of electric vehicles in China this year, shipping over 50,000 units to date." In addition to Tesla, China leads world sales of Apple's iPhone. Shanghai-based CINNO Research showed that on a quarter-on-quarter basis, Apple's China iPhone sales jumped 255 percent in the second quarter. Over the past five years, most US companies that have maintained a friendly relationship with China have enjoyed tremendous success. China's economy is rapidly recovering after being put in hibernation while the country fought the pandemic, and US companies have a bright future ahead of them in the Chinese market.
But cooperation between China and the United States is not just good for the economic development of the two countries. Looking to the future, the responsibility China and the US need to shoulder for world development is far more critical than whether China and the US decouple from each other. As the world's two largest economies, they have a significant impact on the development of the global economy, and they have a shared responsibility to promote international market-based cooperation, work together to address the challenges facing the development of the global digital economy, and strengthen cooperation in the fight against global poverty.
In the face of the challenge of the pandemic, the dynamism shown by China and the US in promoting the liberalization of global markets will increase confidence in the global economic recovery. According to China's Ministry of Commerce, from January to July, US people and companies established 860 new enterprises in China, covering a wide range of sectors, including smart manufacturing and consumer services. However, the current trend of good economic cooperation between the US and China has been misinterpreted by some media as a threat to the US.
According to the Henry Jackson Society, the US is strategically dependent on China for 424 categories of goods. And 114 of these have applications in critical national infrastructure. It has been taken by some US media to be an explanation for the "China threat theory". But these media ignore a fundamental fact: The cooperation between China and the US in industrial structure is a matter of free-market choice, not freedom of choice.
The US chooses to import goods from China not because the US does not have the capacity to manufacture them but because it is in the best interest of the US itself. China is equally dependent on importing large quantities of goods from the US. In the first three quarters of this year, the total value of US-China trade was 2.82 trillion yuan ($422 billion), up 2 percent year-on-year. Of this, exports to the US accounted for 2.18 trillion yuan, up 1.8 percent year-on-year, and imports from the US totaled 640.86 billion yuan, up 2.8 percent year-on-year. International market data shows that despite the fluctuations in relations between the US and China over the past two years, economic and trade cooperation between the two countries is more resilient.
China and the US need to work together to solve the current bottlenecks facing the global digital economy's development. In 2019, the US manufacturing sector accounted for 11 percent of its GDP, but this does not mean that the US will be able to increase employment in the US if overseas manufacturing moves back to the US. The US needs to recognize that with the upgrading of industry and the adoption of intelligent manufacturing, factories that employ "lights-out manufacturing" are fully automated and require no human presence on-site. Therefore, the future capacity of manufacturing to create jobs is limited. China is facing the same challenge. In the digital economy era, technological innovation will become the core competitiveness of a country. But scientific and technological innovation requires global cooperation and maintaining an open social system.
According to a Reuters' report, the rapidly growing internet sector accounted for $2.1 trillion of the US economy in 2018 or about 10 percent of the its GDP. China's digital economy is also snowballing. The value-added of China's digital economy registered 35.8 trillion yuan in 2019, accounting for 36.2 percent of the country's GDP, up by 1.4 percentage points compared with the previous year, according to the China Academy of Information and Communications Technology.
The fast-developing digital economies of China and the US will create extensive opportunities for cooperation between the two countries in artificial intelligence, the industrial internet, blockchain, and other areas. However, synergy in the digital age requires efficient cross-border data flows and sharing mechanisms, which are issues that need to be seriously addressed in future Sino-US cooperation.
China, which has the world's largest digital economy market, has already embarked on a nationwide rollout of 5G mobile communications infrastructure. According to a report released by the Internet Society of China earlier this year, the scale of e-commerce transactions in China last year was 34.81 trillion yuan, occupying first place in the global e-commerce market, and its online payment transactions totaled 249.88 trillion yuan, with mobile payments the most in the world.
US innovation in the mobile internet offers a different option to the world. On Oct 24, SpaceX launched 895 Starlink satellites, heralding the world's first commercial satellite internet service will soon become a reality. According to CNBC news, the initial Starlink service is priced at $99 a month－plus a $499 upfront cost to order the Starlink Kit. Whether it is 5G or the Starlink program, it will contribute significantly to bridging the global digital divide, creating globalized equal opportunities for economic development and helping to reduce global poverty.
Together China and the US can make the world a better place.
The author is an associate researcher with Institute of America Studies at the Chinese Academy of Social Sciences. The author contributed this article to China Watch, a think tank powered by China Daily.
