First, in 20 16, China's merchandise exports to the United States accounted for 18% of China's total merchandise exports and 4.4% of GDP. Exports to the United States are not only concentrated in traditional labor-intensive industries, such as toys, furniture, textiles, etc., accounting for about one-third of the total exports to the United States. With the upgrading of China's manufacturing industry, the export of capital-intensive industries such as electronic machinery to the United States has also increased substantially, and the export volume has surpassed that of labor-intensive industries.
Second, China also relies on the United States for technology import and financing. For example, the key technologies of many high-tech products imported from China are only mastered by the United States. Once the United States stops exporting such core technologies to China, it may have an impact on China's industrial supply chain. For example, Intel and AMD are very popular in the use of personal computer CPU, and most mobile phones in China are also equipped with GPS global positioning system. Once a trade war breaks out, it will take some time for China to find a substitute for this technology.
Third, in terms of direct investment, US direct investment in China accounted for 3.3% of China's total FDI in the past decade, and the number of US-funded enterprises employed in China in the past decade exceeded 1 10,000. The proportion of China's main export commodities in other major exporting countries is already quite high, and the space for further increasing the export proportion and market share is extremely limited. Finally, it is estimated that it is difficult to find an alternative market in the US market.
However, there are also views that the long-term impact of trade friction on China's economy is relatively limited. First of all, the long-term impact of trade friction on the economy is less than the short-term impact on financial markets; Secondly, there is an interdependence between China and the United States that is "too big to fail". This trade friction will not get out of control, and the game between the two countries will eventually converge to a two-way compromise, and there will be no "new cold war" in the new era; Third, China will adhere to the "self-centered" coping strategy, and there is sufficient policy space for short-term coping measures and long-term strength strengthening. Fourth, at present, China's exports to the United States account for 19% of China's total exports to the world, China's exports to countries related to the Belt and Road Initiative account for about 40%, and China is an exporter of intermediate products in global trade, which means that even if the United States unilaterally imposes tariffs on China, China can hedge by increasing trade cooperation with other countries.