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Prof. Yao Yang: Treat the West on Equal Footing

Jan 02-2024   



China-US competition is not a bad thing in itself; as long as China manages the competition and doesn’t let it turn into a confrontation, it might become beneficial, said Prof. Yao Yang of the NSD in a recent interview. At least as far as China is concerned, the competition has forced China to do some something that it didn’t do previously, like doubling down on advanced chips, he said. Prof. Yao is Dean of National School of Development and Dean of BiMBA Business School at NSD.

 

The whole world was pulled into globalization after the Second World War, something unprecedented in human history. The two decades of 1990s and 2000s witnessed super-globalization, said Prof. Yao. However, the world has contracted over the last ten years, with Europe and the US obsessed with re-industrialization and immigration issues. China’s rise has been the most historic development in global economic evolution. It hosts 30% of the world’s manufacturing and is bound to export to the rest of the world since its GDP is at 17% of the global total. The US, on the other hand, has to absorb manufactured products from other countries given the discrepancy between its manufacturing and GDP.

 

The other developed countries have also experienced a decline in manufacturing heft and tried to make adjustments to avoid having a predominant share of imports from one single country. The challenge for developed countries, said Prof. Yao, is that re-industrialization might be forever past its time because their young people would not work in factories. As a result, manufacturing is still being relocated to China, other east Asian countries, and southeast Asian countries.

 

After several decades of rational exchanges with China, the US started to change tack in 2010 and view China as an enemy. Prof. Yao estimated that China-US rivalry, spanning almost all fields such as economy and geopolitics, will continue well into the next 20-30 years. He believed that managing such a competition might be beneficial for China in that the country is thus forced to work on things like high-end semi-conductors. The US is hobbled by industrial hollowness, while its allies are unwilling to pick sides in economic matters. Prof. Yao observed that China-US relations have reverted to relatively rational exchanges over the last year.

 

He advocated that the two countries, though impossible to fully shrug off emotional grips, should ponder over the future on the basis of rational exchanges. In additional, new rules, including WTO ones, should be re-established as per requests of the US, but China can make the best use of the rule-setting process to play a larger role in multilateral organizations like the WTO. The US attempts to limit exports to China is unlikely to change in the near future, but a new balance has been established with Chinese firms producing in Southeast Asia or Mexico for export to the US. A complete de-coupling between the two countries is out of the question, said Prof. Yao.

 

He also advised that China should embrace global horizons by taking on responsibilities for the whole world, including setting rules. It should also treat the West on equal footing and in some circumstances try to understand different countries. At its current level of development, China must conduct itself as a large nation and stand in the global spotlight, said Prof. Yao.

Prof. Yao Yang: Treat the West on Equal Footing

Jan 02-2024   



China-US competition is not a bad thing in itself; as long as China manages the competition and doesn’t let it turn into a confrontation, it might become beneficial, said Prof. Yao Yang of the NSD in a recent interview. At least as far as China is concerned, the competition has forced China to do some something that it didn’t do previously, like doubling down on advanced chips, he said. Prof. Yao is Dean of National School of Development and Dean of BiMBA Business School at NSD.

 

The whole world was pulled into globalization after the Second World War, something unprecedented in human history. The two decades of 1990s and 2000s witnessed super-globalization, said Prof. Yao. However, the world has contracted over the last ten years, with Europe and the US obsessed with re-industrialization and immigration issues. China’s rise has been the most historic development in global economic evolution. It hosts 30% of the world’s manufacturing and is bound to export to the rest of the world since its GDP is at 17% of the global total. The US, on the other hand, has to absorb manufactured products from other countries given the discrepancy between its manufacturing and GDP.

 

The other developed countries have also experienced a decline in manufacturing heft and tried to make adjustments to avoid having a predominant share of imports from one single country. The challenge for developed countries, said Prof. Yao, is that re-industrialization might be forever past its time because their young people would not work in factories. As a result, manufacturing is still being relocated to China, other east Asian countries, and southeast Asian countries.

 

After several decades of rational exchanges with China, the US started to change tack in 2010 and view China as an enemy. Prof. Yao estimated that China-US rivalry, spanning almost all fields such as economy and geopolitics, will continue well into the next 20-30 years. He believed that managing such a competition might be beneficial for China in that the country is thus forced to work on things like high-end semi-conductors. The US is hobbled by industrial hollowness, while its allies are unwilling to pick sides in economic matters. Prof. Yao observed that China-US relations have reverted to relatively rational exchanges over the last year.

 

He advocated that the two countries, though impossible to fully shrug off emotional grips, should ponder over the future on the basis of rational exchanges. In additional, new rules, including WTO ones, should be re-established as per requests of the US, but China can make the best use of the rule-setting process to play a larger role in multilateral organizations like the WTO. The US attempts to limit exports to China is unlikely to change in the near future, but a new balance has been established with Chinese firms producing in Southeast Asia or Mexico for export to the US. A complete de-coupling between the two countries is out of the question, said Prof. Yao.

 

He also advised that China should embrace global horizons by taking on responsibilities for the whole world, including setting rules. It should also treat the West on equal footing and in some circumstances try to understand different countries. At its current level of development, China must conduct itself as a large nation and stand in the global spotlight, said Prof. Yao.