China's secret weapons in confronting trade war

• Source: Global Times
• [05:24 January 07 2010]
• Comments

When "trade war" is becoming the key term defining China's relations with the US and other Western countries in the new year, it is not necessarily a bad thing.

The reason is simple: Rising China is equipped with more secret weapons than ever before, and these weapons are so sharpened as to confront any possible trade war.

These are neither the accumulated foreign reserves that could be dumped to stir chaos in the West, nor the vast market potential that will continue to bring business opportunities to Western companies.

China's adherence to market rules, its savvy to blend in the emerging world order, and above all, its firm determination to take a road that has not been taken by others before – those are the real secret weapons powerful enough to deal with any dispute or conflict.

While the beginning of the year seems to be dominated by the stepped-up rhetoric of trade tensions and news about various protectionist tariffs imposed on Chinese goods, undoubtedly the rule of market and free trade will prevail in the long run.

Be it the decade-long trade surplus of labor-intensive merchandise, or its current strategic shift from "Made in China" to "Created by China," or its fast pace in energy and resource deals abroad, it is always the golden rule of the market and free trade that applies.

And, China's persistent race to market and its pivotal role in the World Trade Organization have not only nurtured its own economic growth, but also made it a reality for Western countries to play fair with China within the system.

The equal standing of emerging economies with developed nations, legitimized by international forums such as G20, have also built China's confidence in confronting any possible trade war with the West.

That we are all in the same boat is a fact recognized by China and the West. Though it may take time before the winds of fortune really change, in the post-crisis, multipolar world, with the growing muscle of emerging economies, no Western country can afford the hefty price that would be extracted by a trade war.

As Mark Twain wrote, "History does not repeat itself, but it rhymes."

The second half of the quote is often stressed by those who view China's threatening rise in the new world order as a replication of the history in the early 1900s.

But a country pursuing peaceful rise emphasizes the first half of the quote, which echoes its innovative approach.

On China's journey ahead, a possible trade war is just a small bump.

Innovation is the ultimate secret weapon in dealing with any contingency that may arise. Trade war is certainly no exception.