Us Trade Representative Leiter Heitzer announced on the 18th that the United States has officially launched a "301 investigation" against China, which has aroused concerns from all walks of life that the United States is taking unilateral actions to damage Sino-US economic and trade relations.

What is Section 301?

What is Section 301? According to earlier reports, the so-called "Section 301" is the abbreviation of Section 301 in the 1974 Trade Law of the United States, and its main meaning is to protect the rights of the United States in international trade.

Under this clause, the United States can investigate the trade practices of other countries that it considers "unfair" and consult with the governments concerned. Finally, the president decides to take retaliatory measures such as raising tariffs, restricting imports and suspending the relevant agreements.

It is understood that in the 1980s, the United States investigated Japan many times in accordance with Section 301, and finally raised tariffs on color TV sets and so on. However, since the establishment of the World Trade Organization (WTO) in 1995, there has been almost no more cases of unilateral sanctions in the United States, and this provision has been called the "last weapon".

Why does the United States conduct a trade investigation against China?

It is understood that before Trump revealed that he would conduct a trade investigation into China, the United States had long accused China of massively stealing intellectual property rights from American companies. and force American companies that want to enter the Chinese market to establish unfair joint ventures with Chinese companies. According to relevant people in the United States, in the form of joint ventures, American companies are actually forced to transfer technology in exchange for access to the Chinese market.

A US official said in an earlier speech: "if Americans continue to sit by and watch their best technology and intellectual property rights be stolen or forcibly transferred abroad, it will be very difficult for the United States to maintain its dominant position and continue to be one of the most innovative economies in the world. However, there are many signs that the protection of intellectual property rights may only be a high-sounding statement of the US trade investigation.

In addition, there is another view that the United States is conducting trade investigations against China in order to reverse the trade deficit. Since Trump took office, he has repeatedly stressed the trade deficit between China and the United States. Trump also said in an interview that he had "lost billions of dollars" in trade with China each year. The U.S. merchandise trade deficit with China was $347 billion (2.36 trillion yuan) in 2016, accounting for 47 percent of its overall deficit, according to the U.S. Bureau of Statistics. Such a large trade deficit is clearly unbearable to Trump, which runs counter to the protectionist platform he put forward during the campaign. Judging from the various trade protection policies implemented by Trump since taking office, the trade investigation into China is more like carrying out trade protection in the name of intellectual property protection in order to revive the US economy.

Will the US trade investigation set off a trade war between China and the US?

First of all, trade investigations may damage international trade rules to a certain extent. In the current multilateral trading system composed of the WTO, the implementation of such a unilateral law may have a great impact on the current international trade relations, and even cause many countries to maliciously emulate, and eventually destroy the current multilateral trade relations.

It is understood that WTO rules explicitly prohibit the unilateral implementation of trade sanctions. Article 301 of the Trade Law of 1974 is a measure for the United States to independently judge the unilateral imposition of sanctions by unfair trade, and it is also very likely to violate the WTO rules. If the Trump administration does launch sanctions, it could be opposed by the world.

The move has also raised concerns that the United States is taking unilateral actions to damage Sino-US economic and trade relations, and there are also views that China and the United States will wage a trade war. However, both the Wall Street Journal and the Financial Times pointed out that due to the length of the investigation and geopolitical factors, there is little chance of a Sino-US trade war. "the final threat of Section 301 has never been activated, nor will it this time. Jin Defang, a professor of politics at the University of Miami in the United States, pointed out that "a trade war will hurt both China and the United States."

In addition, it is understood that the investigation may take a year to decide whether trade sanctions will be imposed. The report of American Brookings Institution researchers Haas and du Dawei points out thatChina's exports to the United States account for less than 5% of China's GDP, and although the US market is still important to Chinese exporters, the relative importance of the US market to China's economic growth will continue to shrink as China's economic growth model shifts from exports and investment to greater reliance on services and consumption. So even if US trade sanctions are imposed, it will not have much impact on China.

　China: there are no winners in the trade war, only lose-lose

According to an earlier report on the overseas website, at a regular press conference of the Ministry of Foreign Affairs on the 14th, spokeswoman Hua Chunying responded to the "US trade survey with China": fighting a trade war will only lead to a lose-lose.

Us President Donald Trump will sign a memorandum on Monday, EDT, instructing the US trade representative to decide whether to investigate "China's trade practices", US media said.

In response, Hua Chunying said that the Chinese side has taken note of the relevant reports. A spokesman for China's Ministry of Commerce answered questions at a press conference on August 3. I would like to emphasize that the Chinese Government has always attached importance to the protection of intellectual property rights, and its achievements are obvious to all. Any trade measures taken by WTO members should abide by the rules of the WTO.

Hua Chunying said: we have said many times before that with the deepening of Sino-US economic and trade exchanges and the close pattern of you and me, there is no future in the trade war, there is no winner, there will only be a lose-lose situation.

Hua Chunying pointed out that the Chinese side has stressed many times that Sino-US economic and trade relations are mutually beneficial in nature. Not long ago, the first round of China-US Comprehensive Economic Dialogue was successfully held in the United States. The most important achievement of this round of dialogue is to establish the correct direction of Sino-US economic cooperation, that is, to adhere to win-win cooperation as the basic principle for the development of bilateral economic and trade relations, dialogue and consultation as the basic way to resolve differences, and to maintain major economic policy communication as the basic way of dialogue and cooperation, which has laid a solid foundation for future cooperation.

Hua Chunying said: China is willing to find a proper solution on the basis of mutual respect, equality and mutual benefit, so as to maintain the sustained, healthy and stable development of Sino-US economic and trade relations.