Chip. Photo:VCG
Recent reports indicate that the US has lifted export restrictions on China for three of the world’s leading electronic design automation software developers and has resumed exports of products such as ethane and aircraft engines. On Friday, China’s Ministry of Commerce confirmed the development, stating that China is reviewing applications for export licenses for eligible controlled items in accordance with laws and regulations, while the US has taken corresponding steps to remove a number of restrictive measures. According to Reuters, the “trade war truce” between the US and China is progressing as planned, with bilateral trade tensions continuing to ease.
China and the US are accelerating the implementation of the outcomes of the London Framework, sending positive signals both technologically and strategically. More importantly, at the strategic level, both sides have demonstrated a mutual willingness to prevent trade disputes from spiraling out of control – choosing to resolve their concerns through dialogue on an equal footing and way of cooperation rather than through escalating confrontation. This message has had an immediate, positive impact on markets: from US stocks to Asian equities, technology shares have seen notable gains – Cadence soared 6.1 percent, reaching a record high, and Samsung’s stock jumped nearly 3 percent. The international community, including the business sector, widely hopes for a stable, enduring, and mutually beneficial China-US relationship.
The implementation of the London Framework once again underscores that the essence of China-US trade relations lies in mutual benefit and win-win cooperation. In 2024, sales from the Chinese market accounted for 27 percent of Intel’s total revenue, with Qualcomm deriving nearly half of its income from China. China’s vast market size and its steadily upgrading industrial demand offer US companies an almost irreplaceable space for growth. At the same time, the smooth flow of American technological products plays a vital role in supporting China’s construction of a modern industrial system. Cooperation between the two countries helps stabilize global expectations and hedge against systemic risks, while uncontrolled competition would lead to a “lose-lose scenario” with spillover effects that threaten global economic stability.
The multiple rounds of “engagement” between China and the US over the past few months can be seen as a sample from which Washington should draw at least three lessons. First, China is not a “soft target” that the US can manipulate at will; Washington needs to abandon the notion of dealing with China through “maximum pressure.” Second, cooperation between China and the US brings mutual benefit, while confrontation harms both sides, and the “winner takes all” scenario that some in the US fantasize about will not become reality. Third, artificially “building walls” and “decoupling” will not make America safer and more prosperous, as the laws of objective reality do not bend simply because it is the US – they will punish anyone who disregards them, equally. These lessons should also serve as an inspiration for other countries engaged in trade negotiations with the US.
The US has recently taken a step in the right direction toward meeting China halfway. However, in many areas, such as semiconductors, biotechnology, and new energy, most of the restrictive measures against China still remain in place.
For example, the regulations regarding semiconductors issued by the US government on October 17, 2023 adopted the De Minimis Rules for the first time. For certain lithography equipment, as long as it contains US elements, an export license from the US is required before it can be shipped to China. In addition, there are numerous other wrong actions, such as restricting normal US outbound investment to China and removing the tax exemption for small parcels shipped from China to the US. These practices not only harm both China and the US, but also seriously disrupt the stability of global industrial and supply chains. The recent positive move by the US to lift certain export restrictions should serve as a starting point for broader policy adjustments. It is hoped that the US will further correct previous missteps and gradually eliminate more unreasonable restrictions.
The mutually beneficial and win-win relationship between China and the US is driven by macro-level trends, is an inevitable outcome of industrial development at the medium level, and is a practical necessity for the micro-level interests of businesses and consumers. In sectors such as high-end manufacturing, the digital economy, agricultural products, and energy, China and the US are deeply intertwined and complementary, creating a network effect where each is embedded in the other.
For ordinary American households, the scale and efficiency dividends embodied by “Made in China” act as a “price safety valve,” effectively cushioning inflationary pressures and safeguarding their quality of life. For Chinese consumers, “intelligent manufacturing in the US” and “US services” are an important source of growth for mid-to-high-end demand and a driver of innovation and vitality.
Although the international community is “anarchic,” it is by no means “unregulated,” and major countries, in particular, must not act without any bottom line. In recent years, China-US trade relations have lingered at a low point since the establishment of diplomatic ties. The reality of mutual interdependence between the two countries has been ignored, the history of win-win cooperation distorted, and channels for dialogue and communication blocked. So-called “strategic competition” is defining and influencing China-US relations in a dangerous way.
As an old Chinese saying goes, “When your actions do not yield the desired results, you should examine yourself for the reasons.” The US’ attempt to alter market principles through unilateral pressure is as futile as trying to swim against the tide. China-US economic and trade relations are mutual and reciprocal. If we respect each other and cooperate on an equal footing, mutual benefit and win-win results will be achieved, while if the US reneges on commitments and provokes disputes, it will inevitably trigger firm countermeasures from China.
China and the US have a combined economic output that accounts for over one-third of the global total and the total population of the two countries accounts for nearly one quarter of the world’s total. A healthy, stable and sustainable development of bilateral economic and trade ties is crucial not only for both countries, but for the entire world. We hope the US will take concrete actions to uphold and implement the important consensus reached by the two heads of state during their phone call, and work together to ensure the steady and long-term development of China-US economic and trade relations.