Sino us trade war

Document Type:Essay

Subject Area:Economics

Document 1

Regarding the issue of Sino-US trade war, the article by Wang, Pang & Li (2019) presents an exploration of the triggers of the trade friction between these two nations, along with some of the recommendations to end the trade war. This paper is a response to the article by Wang, Pang & Li (2019). An analysis of the comparative advantages between the two countries indicates that China has a competitive advantage in the world market when it comes to export of transport equipment, machinery, manufactured goods and miscellaneous products (Wang, Pang & Li, 2019). On the other hand, the US has a stronger competitive advantage when it comes to crop exports, chemicals, non-food raw materials (except fuels), finished products, and machinery (Wang, Pang & Li, 2019). Essentially, the U.

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For China, the reason why there is a trade deficit is due to the U. S. policies that restrict the exportation of high-technology goods to China. Why then, should the U. S. S. also opposes this policy and practice on the basis that it is against intellectual property rights (Cooter & Ulen, 2016). Furthermore, the U. S government also argues that Chinese companies have been using cyber espionage to hack industrial secrets and technology from the U. S. Other than just the claims of protecting the intellectual property rights and technological expertise of their high-tech companies, it can also be argued that such policies are meant to decelerate the growth of high-tech industry in China. China has a plan called “made-in-China-2025” that will see them improve the development of the high-tech sector by investing in research and development (Wang, Pang & Li, 2019).

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Since the strength of the U. S. economy lies in their high-tech sector, they fear that China's growth in this sector will threaten their industries and thus they would rather not allow export of such goods, if it means the Chinese companies would steal their know-how. In other words, Chinese consumers have inadequate buying power for U. S. -manufactured goods (Wang, Pang & Li, 2019). If Chinese industries do not sell their cheap necessities in the U. S. To be able to solve the problem, it is important that the two nations come up with an agreeable measure of the problem so that the solutions they come up with can clear the deficit. The article recommends that the two governments should use negotiation to seek a political reconciliation, as a way of solving the Sino-U.

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S trade war. This is because the trade war is not just an economic issue, but also a power/political issue or collision between the two nations. The two nations, in this case, must be willing to make some concessions. S. as it will ensure that even if there a problem with restrictions in China, they can sell to other nations as they try to find a consensus. To sum up, consumers and traders from both nations are feeling the impact of the Sino-US trade war. Due to the differences in market demand structures, the two nations need each other and the trade war would harm both of the nations. The two nations, therefore, should make their trade relations to be complementary as opposed to competition.

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