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The way forward for China's globalisation plans

The US-China trade disputes have multifaceted dimensions - commercially, economically and politically. The article (China: From humble student of world trade to staunch defender; April 25) provides a better understanding of China's position.

Although there is a huge trade imbalance between the two countries in favour of China, one must not be obsessed by statistics alone. It is alleged that China coerced foreign firms operating in China to transfer their technology.

This overlooks the fact that such joint ventures are cash cows for the two business partners.

For example, statistics portal Statista shows that China has seen passenger vehicle sales growing from 3.97 million units in 2005 to 24.96 million units last year, compared with a decline in the United States, from 7.7 million units to 6.1 million units over the same period. Thus, is this lucrative partnership to transfer technology to domestic markets entirely unfair and unreciprocal?

The US also claims that China turns a blind eye to intellectual property rights (IPR).

The Global Start-up Ecosystem Report 2018 reveals that China has surpassed the US in patent applications, with four times as many artificial intelligence-related patents and three times as many blockchain-related patents last year. Doesn't this signify that China has a vested interest in protecting IPR?

China has promised to further open its market, including scraping foreign ownership limits.

However, China is in a dilemma in pursuing globalisation.

On the one hand, in its quest for modernisation since the 1980s, China has successfully integrated what many considered to be seemingly irreconcilable elements: state ownership and private enterprises, central planning and a free market economy, strong centralised government and a certain degree of cultural or social freedom.

On the other hand, this pragmatic model seems to be incompatible with the World Trade Organisation's call for minimum state ownership in business.

In China, the theory of "Three Represents" is written in the Chinese Communist Party's Constitution to open up the party to businessmen. This gives the impression that business enterprises are often intertwined with government agencies.

China needs an institutional and academic approach as well as soft power to deal with this dilemma, in order to minimise trade hurdles and to manoeuvre internationally.

Paul Yong Teck Chong

A version of this article appeared in the print edition of The Sunday Times on May 06, 2018, with the headline 'The way forward for China's globalisation plans'. Print Edition | Subscribe