President Trump suddenly imposed tariffs on $200 billion of Chineseproducts to 25%. The Chinese government immediately responded to impose thesame tariffs on $60 billion of American goods. Apart from the drastic reactionof the stock markets of the two countries, we heard a lot of shouts for war. Itseems that the trade war has officially begun. Both sides are claiming thatthey can win in this battle. This seems familiar. We have seen a lot in humanhistory. Edward Gibbon, author of The Decline and Fall of the Roman Empire,once said, "History is, to put it bluntly, a record of human crime, follyand misfortune." The greatest "crime" is war, and what leads towar is "stupidity", and the result of war is "misfortune".When a war is over, people often find that compared with the disasters broughtabout by war, the cause of war is often a trivial matter. For example, WorldWar I. The so-called "stupidity" is the wrong calculation. Generally,people often overestimate their winning rate. The result is that the loserthinks in advance he can win, and the winner thinks he won't pay too much.
President Trump was wrong in his calculating to impose tariffs onChinese products. He said tariff increases had no negative impact, but onlyincreased the revenue of the U.S. government. As President of the UnitedStates, he seems to have no concept of seigniorage. I have pointed out that ifthe dollar is also counted as a commodity, the United States has no tradedeficit. The dollar is the most profitable of all U.S. exports. If thetechnical and institutional costs of issuing US dollars are 20%, the profitmargin is as high as 80%. If Trump wants to reduce the $200 billion tradedeficit by imposing a 25% tariff on $500 billion of Chinese goods, the U.S.government will get $75 billion in tariff revenue (some of which are paid byAmerican citizens), but reduce the $200 billion Seigniorage tax, which isobviously not worth it. What's more, seigniorage revenue is an additional partof U.S. national income, which can be used to equalize thehigher-than-world-average portion of U.S. military expenditure. Reducing thetrade deficit means reducing seigniorage revenue, and reducing resources formilitary expenditure.
Some would argue that the dollars foreigners earn through trade aretheir creditor's rights to the United States, not the income of the UnitedStates. Perhaps this is where Trump and his economic advisers' vagueunderstanding of seigniorage. As long as we regard paper money as gold andsilver, we know that money is a commodity. Its utility is to facilitatetransactions and thus has independent value, which can be seen from theindependent value of Bitcoin. This independent value will be recognized as longas people believe it, and insufficient-value money and even paper money canemerge. The advantage over gold and silver is that the seigniorage profit ofpaper money is very high, and through artificial monetary policy, even a largeamount of outflow will not make the domestic money supply insufficient. Infact, the US dollar exported through trade deficit and returned to the UnitedStates in the form of purchasing US financial assets, especially US Treasurybonds, enabled the seigniorage revenue to actually allocate resources to themilitary industry of the country in the form of US government orders toenterprises.
On the other hand, some people in China have made calculations infavor of China. As Mr. GAO Lingyun, Institute of World Politics and Economics,Chinese Academy of Social Sciences, points out, 90% of Trump's tariffs areborne by Americans and only 10% by Chinese. Even if the algorithm is correct,it is obviously only a simple and comparative static calculation. As we know,the calculation of Chinese as producers is different from that of Americans asconsumers. For consumers, if the goods are expensive, they can buy less or not.They can also buy similar products produced in other countries. The more tariffcosts American consumers bear, the higher the price of Chinese consumer goodsthey buy, because there is price elasticity, the less they buy. This willbecome more pronounced over time. Reducing the total demand for Chinese goodswill reduce the orders of Chinese producers. The misleading thing about staticestimates is that they only see short-term reactions, such as China's tradesurplus with the United States rising in 2018 without falling, whiletemporarily failing to see negative long-term results. In fact, by the firstquarter of 2019, China's exports to the United States had fallen by 8.5%compared with the same period last year.
As a producer, 25% of 10% is 2.5%, which is fatal for manufacturingenterprises whose normal net profit of sales is less than 5%. This cancompletely offset the effect of China's massive tax cuts this year (2%). Inrecent years (2012-2016), the return on net assets of China's manufacturingindustry minus risk-free interest rates and reasonable risk premiums, averagedabout -2.6% (SHENG Hong, "government share expands, profit margins areexhausted", 2018), and capital is no longer profitable. Considering thereduction of total demand, the idle rate of equipment will be increased and theunit cost will be increased. In the long run, a large number of Chineseenterprises and foreign-funded enterprises in China have to consider reducingor even closing their production capacity in China and transferring to othercountries. Similar products produced in these countries will eventually replaceChinese products in the U.S. market. Permanent loss of market is a significantloss of customer assets, the amount of which should be estimated by the futurediscount value of the total reduced profits each year. For example, if theannual loss of profits is $10 billion and the discount rate is 4%, the discountvalue of future earnings is about $250 billion. If various factors, such aslabor and land, are taken into account, the loss will be calculated in terms ofadded value, which is $60 billion in terms of manufacturing value added rate of30%, and the loss of customer assets will be as high as $1500 billion.
In fact, it is a simple common sense of economics that trade bringstrade dividends. This trade dividend is divided into producer surplus andconsumer surplus and is shared by producers and consumers. Reducing atransaction will reduce the corresponding producer surplus and consumersurplus. In an undisturbed market, an existing trade partnership is the bestrelationship. If a seller threats not to sell or a buyer not to buy as theweapon for a trade war, it is impossible to harm the other party without loss.Because they leave the traditional trading partners, they can only findsuboptimal partners, that is, sellers can only sell at a lower price than theoriginal price, and buyers can only buy at a higher price than the originalprice. So when we see people saying what kind of "weapon" with we can"win" in trade wars, we must understand that even if we can win, wewould be worse than "no fight". It hasn't been calculated yet thatthe losses caused by the other side's retaliation and repeated retaliationbetween the two sides. More importantly, we must not use this as a basis tostimulate our fighting passion and push the conflict that may be peacefullyresolved into a state of war.
It should be said that because of the complexity of economic systemand human society, human beings have no ability to calculate all the lossesthat a trade war may bring. Hayek once said, "The direct effects of anyinterference with the market order will be near and clearly visible in mostcases, while the more indirect and remote effects will mostly be unknown andwill therefore be disregarded. We shall never be aware of all the costs ofachieving particular results by such interference." Compared withnon-trade, distorted trade, or restricted trade, the value of free trade is notonly static producer surplus and consumer surplus, but also the deepening ofdivision of labor and specialization caused by the expansion of market scalebrought by trade. The market information system formed by trade guidesproducer's investment decision-making and stimulates innovation inspiration,and the business model The change of business models, technical means andproduction technology caused by trade competition, and the new institutionalarrangement formed by the change of contract modes; all of them will bringabout unexpected efficiency improvement, cost reduction and market expansion.So when free trade is distorted and restricted, the losses we suffer areincalculable. If someone says they can count and claim that one side can win,it's probably not because of patriotism. We need to keep a high degree ofvigilance.
Although we cannot quantify and compare the losses of all parties inthe trade war, we do know one of the most basic and simplest criteria: freetrade is better than non-trade, distorted trade and restricted trade. Thismeans that, at least among roughly equal trading partners, free trade willbring benefits to either side, while non-trade, distorted trade and restrictedtrade will bring disadvantages. The best trade negotiations must aim atfollowing the principles of free trade rather than calculating the specificgains and losses of trade wars by what means. The worst strategy is based onthe so-called calculation. Therefore, the ultimate goal of this Sino-US trade negotiationsshould be to improve existing trade relations and move towards a more equitablefree trade. Trump's tariff stick should be used only as a means of facilitatingnegotiations and correcting distortions, not as an end in itself.
Unfortunately, it now seems that the tariff stick has come. It hastwo disadvantages. First, it makes Sino-US trade relations more far away fromfree trade, which not only increases trade restrictions, but also makes themarket more distorted. In China, non-state-owned enterprises have the realability to export and compete with other enterprises in the world market. Notonly are state-owned enterprises inefficient and unable to compete with otherenterprises in the world, but they also have monopoly power in the domestic marketin addition to huge subsidies. Even in this case, the nominal return on netassets of state-owned enterprises is significantly lower than that of privateenterprises without these subsidies, such as the return on net assets ofnon-state-owned industrial enterprises in 2013 is 15.64%, and the return on netassets of state-owned enterprises is only 8.73%. This shows that theinefficiency of state-owned enterprises completely offsets the benefits ofsubsidies. With such low efficiency, most state-owned enterprises cannotcompete in the international market.
Therefore, the real cause of the high trade deficit in the UnitedStates is mainly China's private enterprises and foreign-funded enterprises.According to the Ministry of Commerce, according to March 2019 data,state-owned enterprises account for only 10% of the total export volume, andthe remaining 90% of the export volume is created by private enterprises andforeign-funded enterprises. As a result, the bulk of Trump's tariffs areimposed on private enterprises and foreign-funded enterprises withoutgovernment subsidies. This is not to correct market distortions, but to punishcompanies that follow market rules, and make the market more distorted.Consideration should also be given to the $60 billion in US goods that havebeen tariffed because of the Chinese government's counter-measures, whoseproducers are also innocent. If only $20 billion of the $260 billion is thecommodity of state-owned enterprises, it would be equivalent to punishing andcorrecting $20 billion (7.7%) of unfair trade, by imposing tariffs on $240billion (92.3%) of fair trade. It's not fair, also foolish.
Figure 1 Export share ofvarious kinds of Chinese Enterprises
Data source: Ministry of Commerce website
Secondly, it may shift the focus of trade negotiations and focus theattention of both sides on tariff wars, and on this basis, carry out furtherretaliation against each other. The original purpose may be completelyforgotten. The general imposition of tariffs on Chinese goods has causedwidespread losses to private enterprises and foreign-funded enterprises. Theywill rise up against this measure, and become the political motive force ofnegotiation that seemingly safeguards the interests of the state whileprotecting the monopoly interests of state-owned enterprises. It is preciselybecause Trump's tariff stick did not hit state-owned enterprises, so they arenot afraid of such tariff war, but hide under the shell of "nationalinterests" and do their best to influence China's trade negotiations, soas to deviate from China's overall national interests and benefit them. Privateenterprises and foreign enterprises that follow the market rules are their hostages.Once the tariff stick smashes, they hide among the hostages and will not bedirectly injured. They even snicker. On the other hand, Trump, in order topunish a handful of enterprises for unfair trade, has generally harmed Chineseenterprises, especially private enterprises, making them enthusiastic andresentful, supporting state-owned enterprises with nationalist attitudes. This,on the contrary, prevents China and the United States from reaching agreementon correcting unfair trade and following the principle of free trade. Further,the resulting Chinese counteraction is more likely to lead the two sides into avicious circle of mutual retaliation, so that they may forget what they werenegotiating for.
What is the negotiation for? As has been said before, the purpose ofnegotiations is free trade. To make it concrete, it should be the principle offair trade and the rule of law. Following fair trade rules is to eliminate allunfair phenomena, including subsidies, restrictions on entry, infringement ofintellectual property rights, concessions, monopolies and other preferentialpolicies, while the rule of law is to use the compulsory force of the state tofairly adjudicate trade disputes. Fair trade is voluntary in most cases, whilein a few cases it requires the compulsory maintenance of the rule of law.Therefore, the rule of law is also an important system of fair trade. Moreover,the principle of fair trade and the rule of law are the basic consensus of thetwo countries and their governments. We needn't say anything about the US side.The Chinese government stresses that "the market plays a decisive role inresource allocation" at home and that the principle of free trade withforeign countries goes hand in hand with the principle of fair trade. TheFourth Plenary Session of the Eighteenth Central Committee of the CommunistParty of China emphasizes the construction of a "country ruled by law, agovernment ruled by law and a society ruled by law". Although there aremany problems violating the rule of law in reality, in principle, effortsshould be made towards the realization of the rule of law. Therefore, this isthe principle basis of Sino-US trade negotiations. We can use the principle offair trade and the rule of law to measure the means of negotiation used by bothsides in trade negotiations and the text of the agreement to be reached.
Liu He pointed out that an important disagreement in this round ofSino-US trade negotiations is that the Chinese side requests that afterreaching an agreement in the negotiations, the US side should cancel thetariffs, 25%, already imposed on China's $60 billion commodities and 10% on$200 billion. This is clearly a normal requirement. And as mentioned above,this measure actually violates the goal of the negotiations - fair trade,imposing tariffs on innocent Chinese non-state-owned enterprises, and is a blowto the principle of fair trade itself. Similarly, according to the Wall StreetJournal, it is against the principle of fair trade that the United Statesrequires a reduction of the trade deficit with China by $200 billion by 2020.If this requirement becomes an intergovernmental agreement, the Chinesegovernment will either increase purchases by government agencies or state-ownedenterprises, or force private enterprises to buy it. This will not be a marketbehavior based on cost-benefit calculation, but will greatly reduce theefficiency of resource allocation, and even bring false demand information toAmerican enterprises. In this process, government agencies and state-ownedenterprises will also increase their weight in China's economy. They may alsoask for government subsidies to execute administrative orders for purchases.This is clearly not fair trade.
Of course, China is in a period of strategic transformation from itscurrent stage of development. As I have proposed, China should change from"Made in China" to "China Market" and open up a largerdomestic market to contribute to the world economy. At the same time, becauseof the "gigantic- country effect", that is, according to ProfessorKrugman's new trade theory, "in free trade, larger countries will haveadvantages", China as the largest country has the greatestadvantages"; although China is still ranked low in technological andinstitutional competitiveness (the 13th in 2018, according to the SwissLausanne School of Management), there isa trade surplus with countries andregions ranked before it (such as the U.S. ranks No.1). This shows that Chinahas the strength to achieve equal or even unilateral free trade relations.Therefore, the fair rule of reducing the trade balance between China and theUnited States is to implement the equivalent tariff rate and other non-tariffarrangements between China and the United States, that is, China can first reducethe tariff rate to the level of the United States, and further, China and theUnited States can implement zero tariffs with each other. Thus, the Sino-UStrade agreement can achieve this principle of reciprocity to replace themandatory requirement of reducing the balance of $200 billion by 2020.
Figure2 Weighted average import tariffs imposed by China and the United States oneach other's products
Data source: World Bank, World IntegratedTrade Solution.
Considering the asymmetry of tariff ratesbetween China and the United States so far, the weighted average tariff rate ofthe United States on Chinese goods is 2.9%, while that of China is 6.3% (2016).Once the tariff rate is equal, the trade gap between China and the UnitedStates will gradually narrow. When this problem is solved, only structuralproblems will be solved, and the scope of the problem will be greatly reduced.Moreover, on structural issues, China and the United States are lessantagonistic, and the principle of reciprocity can play a more effective roleat this time. The structural issues raised by the United States include theprotection of intellectual property rights, the opening of the domestic market,the subsidy of state-owned enterprises, the free flow of Internet data and soon. All these problems are also structural in China.
For example, for the intellectual propertysystem, different types of enterprises have different performance.Non-state-owned enterprises mainly depend on the intellectual property system,and their effective patents account for 97% of all patents, while the effectivepatents of state-owned enterprises only account for 3% (2016, NationalStatistical Office), they rely more on the so-called national research fund,which is about 800 billion yuan per year. As I pointed out in the article"Rule of law is the core technology", it is precisely because of thelack of an effective incentive and restraint system in the National ResearchFund system, the inefficiency of its use and the fact that only 20-30% of thepatented scientific research achievements are applied for, that the state-ownedscientific research institutions and state-owned enterprises are more focusedon introducing technology. Because a large number of state-owned enterprisesare in monopoly industries, only they have the ability to force foreignenterprises to transfer technology at low prices, such as high-speed railtechnology. The reform of China's scientific research system is to reduce thegovernment's Research Fund for applied research to state-owned scientificresearch departments for 500~ 600 billion yuan per year, to use more funds forbasic research, and to make state-owned scientific research institutions moredependent on the intellectual property system for applied research. Therefore,Chinese society needs to further improve the intellectual property system andstrengthen the protection of intellectual property rights. This is in line withthe requirements of the US side.
Again, the problem of administrative monopolyis a problem that Chinese society has been trying to solve for a long time, butit is difficult to solve. Some state-owned enterprises have long monopolizedoil, banking, telecommunications, railways and salt industries. According toour estimates, the welfare losses caused by these administrative monopoliesreached 2273.4 billion yuan in 2013 (Unirule Institute of Economics, Causes,Behaviors and Elimination of China's Administrative Monopoly (Second Edition,2015). They not only bring enormous loss of efficiency, but also unfairredistribution of wealth. Monopoly interest groups are an important obstacle tothe further marketization and legalization of China. Although there is nocorresponding legislative basis for the establishment of these monopolies, evenif successive governments want to break monopolies, such as Premier WEN Jiabaoproposed breaking oil monopoly and Bank Monopoly, two "Non-stateEnterprises 36 Articles" emphasize opening up the monopolized market toprivate enterprises, shortening the negative list of market access, and theNineteenth National Congress of the Communist Party explicitly proposed"breaking administrative monopoly". However, there has been littlereal progress in the confrontation of monopolistic interest groups. However, itis still the case at home, which is manifested by international problems, andis regarded as a problem that China's market is not open to foreignenterprises. In fact, this is also a structural issue in China, and is the goalof reform. This is in line with the pressure of the US side to open up China'sdomestic market.
The free flow of information on the Internetis also a structural problem. Although China's Cyber Security Law stipulatesthat "the state protects the rights of citizens, legal persons and otherorganizations to use the Internet in accordance with the law,...","to ensure the orderly and free flow of network information according tolaw." However, in violation of Article 35 of the Constitution and the Lawon Network Security, the relevant administrative departments set up firewalls,which, besides suppressing attempts to expose corruption and criticize abuse ofpower, selectively prevented foreign enterprises from entering the Chinesemarket. The beneficiaries are the competitors of these overseas enterprises inChina. For example, restrict Google, Twitter, Facebook, Yahoo, YouTube,Instagram, WordPress,... And cloud computing services, etc., are unfairlyprotecting domestic counterparts and hurting domestic consumers. Theseenterprises, especially the platform monopoly enterprises, not only without abottom line invade the privacy field of citizens and enterprises by using theconvenience of providing network services, but also arbitrarily close thewebsites, microblogs, WeChat public numbers, live broadcasts and other networkmedia with commercial value, violate Article 40 of the Constitution toarbitrarily invade and close personal WeChat which accumulated communicationresources and being necessary communication tool. The beneficiaries ofrestricting the free flow of data are only a few monopolistic and power-abusedinterest groups. Most Chinese enterprises, citizens and even governmentagencies are victims.
This structural inequality is isomorphic athome and abroad. One country protects the intellectual property rights ofdomestic enterprises while protecting the intellectual property rights offoreign enterprises; another country cannot effectively protect theintellectual property rights of domestic enterprises, so it cannot respect theintellectual property rights of foreign enterprises; one country providessubsidies to some domestic enterprises, which not only compete in the domesticmarket, but also export to another country; another country does not providesubsidies to all domestic enterprises, there are no enterprises enjoyedgovernmental subsidies to export to foreign countries; some industries in onecountry are only open to some enterprises, not to other domestic enterprises, alsonot to foreign enterprises; while the domestic market in another country isopen to all enterprises, while all non-key industries are open to foreignenterprises; and the Internet in one country restricts the entry of domesticenterprises, also restrict the entry of foreign enterprises, while the internetof another country has no access restrictions at home, and no accessrestrictions on foreign countries. These structural inequalities between Chinaand the United States and structural inequities in China are actually a problem.The United States put forward "structural reform" in thenegotiations, and the Chinese government put forward "supply-sidestructural reform" in 2016. Its main content is to solve structuralproblems by promoting marketization and reducing government intervention. Inthis seemingly irreconcilable area, China and the United States actually have acommon ground and mutual needs. The solution is the principle of structuralequivalence.
For example, under the premise of tariff rateequivalence, to the enterprises who enforced enterprises of another country totransfer technology by monopolizing the domestic market, another country shouldimpose restrictions on the entrance of these enterprises in the markets ofanother country; one country should impose high tariffs on such importenterprises, which enjoy governmental subsidies, for offsetting the advantagesof the subsidies; these subsidies include free land, low-interest loans andlow-price royalties. In the case of monopolizing the domestic market, especiallythe monopoly power obtained by administrative order, which prevents otherenterprises and enterprises of another country from entering the same kind ofmarket, another country may also take corresponding measures to prohibit themfrom entering the same kind of market in that country; in the case of domesticcompetitors blocking Internet enterprises of another country from entering itsown market, another country shall also prohibit such enterprises from enteringthe country's Internet market. As long as we adopt this structural principle ofreciprocity, we find that trade negotiations only need to discuss theequivalence of tariff rates and non-tariff measures. Other issues can be placedoutside trade negotiations and only structural negotiations can be conducted.In this way, the general tariff war can be avoided, and innocent enterprisesthat follow market rules cannot be hurt. The effect can be immediate if thepressure is directly applied to the parties involved in unfair trade. Whilesolving structural problems, it will also have a positive impact on Sino-UStrade balance.
To the issue of implement that The United Statesemphasizes, the best way is the rule of law, which is consistent with thedirection toward rule of law decided by the Fourth Plenary Session of theEighteenth Central Committee of the Communist Party of China. Since the reformand opening up, China has gradually established a relatively reasonable legalsystem through long-term legislative work. In view of the above structuralproblems, there are corresponding legal provisions to solve them. Its biggestproblem is that it cannot be effectively implemented. In the above-mentioned"Decision", it emphasizes "improving the system to ensure theindependent and impartial exercise of judicial and procuratorial powersaccording to law", and makes specific provisions that party and governmentleaders should not interfere in and interfere in the judiciary. This is thejoint point of joint efforts between China and the United States. The principleof the rule of law is "no connivance, no wronging". It's much betterthan waving a tariff stick indiscriminately. And the law and due process canonly be activated in litigation, and can also produce the role of a model casein society. Therefore, it is necessary to solve the problem through caselitigation in the judicial system, so as not to harm the majority of innocentpeople, but also more targeted. Considering the lack of legal capacity ofindividual enterprises, the U.S. government can also set up a comprehensivelegal aid program to help enterprises. In China, the promotion andimplementation of the rule of law also requires specific litigation cases.Therefore, this arrangement should not only be regarded as a substitute fortariff measures, but also as a help and promotion to the construction of therule of law in China.
Finally, the principle of structuralequivalence should also be embodied in textual equivalence and mutual respect.Seeing the U.S. Negotiation Text disclosed by the Wall Street Journal, if it istrue, seems to show some emotional and inappropriate universal judgement. Thisis a detail, but it may eventually hamper the agreement. Since we believe thatunfair trade is not a general problem, but a structural one, the universaljudgements to a country is wrong. The real war is not between the United Statesand China, but between the two principles, between free and fair trade anddistorted and restricted trade, between trade and war, so the text of theagreement should not be disrespectful to one country at all. What reallydeserves no respect is distorted and restricted trade, and war. So all theabove principles of equivalence can be expressed in a balanced way. Forexample, subsidies to trade and investment by either party should be prohibitedand punished, monopolies by either party should be broken, infringements ofintellectual property rights by either party should be stopped, and compensatefor those who are infringed, and the Internet of either party should be freeand unimpeded, and so on. This is fair in principle, but in specific cases, itmay impose greater constraints on specific entities that violate fair traderules. This is just as the law is fair, but it plays a different role foroffenders and law-abiders.
Once the general tariff confrontation isreplaced by the principle of structural equivalence, the scope will be 7.7% orone thirteenth of the original tariff confrontation. This not only greatlyreduces the cost of confrontation, but also makes compromise easier andagreement easier to reach, so as to solve the problems that should have been solved.Otherwise, the corpses are everywhere, and the blood flows in vain. Punishmentsare not upon the criminals. The illegal are at large, and the problem stillexists. People don't know why they fight. Faced with those who advocate a tradewar "at all costs", people will ask why they cannot compromise withone percent or one thousandth of the price they want to pay for a trade war toreach an agreement that can greatly reduce current losses and benefit futuregenerations. This part of the price is paid by the people who should pay, thatis, those who do not follow the rules of the market. We can't support Chinesepeople who don't follow fair market rules and hurt other Chinese people justbecause we are Chinese. When structurality is combined with the principle ofreciprocity, compromise is not sacrifice, but the necessary cost of achievingbetter results, just like the cost of any investment. Because the principle ofreciprocity itself is a priceless treasure of mankind. For China, the principleof reciprocity can not only solve international disputes, but also solve thereform problems that China has to solve domestically. It shows the prospect ofcontinuing the road of reform and opening up that has been going on for morethan 40 years, so that China's miracle shocked the world once again.
Recently, I saw Mr. MA Xiaoye's clarificationof "the principle of reciprocity", and I think it is very necessary.I want to emphasize that the principle of reciprocity was not invented byAmericans. China has a long tradition. Confucius said, "do not impose onothers what you yourself do not desire" Isn't it the principle ofreciprocity? If you do not want other people's high tariffs, you should notimpose them on others; if you do not want your intellectual property rights tobe infringed, you should not infringe on other people's intellectual propertyrights; if you do not want others to prevent them from entering their market,you should not prevent others from entering your own market; if you do not wantothers to get subsidies and gain advantages, you cannot get subsidies to gainadvantages. 。 Mencius said that monopolists are"contemptible men", so the idea of breaking monopoly has existed inChina since ancient times. The civil elites in On Salt and Iron states that"Emperor does not say more or less, princes do not say benefit or cost,and officials do not say win or lose". It means that governmentdepartments cannot do business, so state-owned enterprises should reform andfinally withdraw from history. In terms of structural reform, China and theUnited States have not only a consensus in principle, complementary interests,but also cultural overlap. Think of this, feel that there is no importantthings to fight in the world; if there is no wisdom, there will be a warwithout reason. Was Edward Gibbon wrong?
May 25, 2019 at Fivewoods Studio
May 29, 2019 firstly published by both FTChinese and China-review Weekly