Global trade balance requires the US and Europe to abandon zero sum thinking

Editor's note: The previous article in this series explained that in today's deeply intertwined global industrial chain, trade balance is a natural result of market laws and division of labor cooperation. Behind China's trade surplus of over 1 trillion US dollars, it is a reflection of China's deep integration into the global industrial division of labor system and its important contribution to the development of the world economy. It is worth emphasizing that China hopes to see a balance between its own imports and exports, as well as a long-term supply-demand balance in global trade, but this cannot be adjusted solely by one country. If some US and European countries cannot let go of zero sum thinking and continue to adopt a double standard approach and impose unreasonable restrictions on China, hindering China from further expanding imports, increasing investment, and carrying out production cooperation, such practices will be a disruption to the long-term openness, stability, and balance of global trade.

Speculation on trade surplus, accusations of subsidies, exposure of US European double standards and unfair competition

Speculating on China's trade surplus figures is just one of the manifestations of some countries in the United States and Europe using zero sum thinking to view China's development. In May last year, a Chinese scholar wrote an article analyzing that some Western public opinion slandered China's provision of high-quality and affordable products to the world as "dumping", "disrupting global prices and distorting markets", and threw out the fallacy of "China's new energy 'excess capacity' threatening the development of other countries' industries and impacting the world economy". This politicization and securitization of economic and trade issues conceals the malicious intention of containing and suppressing China's industrial development, aiming to seek a more favorable competitive position and market advantage for the country.

Throughout the history of modern economic development, there have always been surplus countries in each period. Manufacturing powerhouses such as the United Kingdom, the United States, Japan, and Germany have all followed the economic law of "comparative advantage" and become major exporters of manufactured goods, as well as major sources of trade surpluses. Nowadays, some countries in the United States and Europe are politicizing China's trade surplus narrative, which is essentially an externalization of their efficiency anxiety and cognitive bias.

China is attempting to penetrate the core of European industrial and innovation models, "French President Macron recently claimed. I think Macron was wrong. He saw the weakness in French industry, and when a weakness appeared in a certain field in Europe, people were always eager to find a scapegoat. But the weakness was not in others, it was in ourselves, "said Professor Ferdinand Dudenhofer, director of the Bochum Automotive Research Institute in Germany and known as the" godfather of cars ", to a Global Times correspondent

Dudenhofer explained that in the past 30 years, Europe has gradually fallen behind in cutting-edge research fields, mainly due to frequent elections, political divisions, and a lack of stability and long-term planning in political and research policies. In contrast, China has a systematic advantage in this regard. He said, "In Germany and Europe, research directions change almost every few years, which makes it impossible to achieve our goals. So we should reflect on ourselves seriously and not rush to shift the responsibility onto others

In addition to hyping up the trade surplus, some countries in the United States and Europe have increased subsidies for their own industries, while at the same time fabricating the argument that "Chinese subsidies cause overcapacity" and accusing China of industrial policies, which is also a typical "double standard" approach.

The first US Treasury Secretary, Hamilton, proposed in 1791 to support domestic manufacturing with tariffs and subsidies. In 2022, the US President successively signed the Chip and Science Act and the Inflation Reduction Act, blatantly competing for industrial advantages through discriminatory subsidy policies. The EU provides targeted support for local industries under the framework of "strategic autonomy" and "de risking". For example, France has implemented subsidies and incentives for electric vehicles since last year, and electric vehicles using Chinese made batteries may not receive subsidies due to their low carbon footprint scores. The European Union made a final ruling on anti subsidy measures in October last year, imposing a "anti subsidy tax" on pure electric vehicles originating in China. China criticized this as a protectionist practice of "unfair competition" under the guise of "fair competition". The fairness of the EU's anti subsidy investigation procedure has also been questioned due to the deliberate exclusion of European and American companies in China from the sampling.

The emergence of China's trade surplus follows market rules, but some countries in the United States and Europe are unwilling to recognize the achievements of a developing major country and distort them as so-called "unfair competition", believing that China's development will inevitably come at the cost of harming the interests of the United States and Europe. This is not a fact, but also an oversimplified and narrow-minded understanding of international economic and trade cooperation.

By cooperating with China, we can precisely benefit from it and enhance our own strength, "Dudenhofer told reporters. He cited the automotive industry as an example and said, "For the German automotive industry, a world without China is unimaginable. Without the Chinese market, the German automotive industry cannot establish itself. China is also a leader in the field of future automotive technology, and we are learning from China in areas such as software, artificial intelligence, lithium-ion batteries, autonomous driving, and unmanned driving. For example, Volkswagen Group and Audi have achieved significant development through the 'In China, For China' strategy, including cooperation with Horizon Robotics, Xiaopeng Motors, and SAIC Group. Without Chinese technology, the situation of German automakers will be very difficult

Technology blockade makes China 'unable to buy'

Some countries in the United States and Europe accuse China of "only selling and not buying", but at the same time, they impose technological blockades on China under the pretext of so-called "national security", leading to the absurd situation of "China wants to buy but cannot" at present.

Chips are the most typical example. A report from the Center for Strategic and International Studies (CSIS) states that the United States has taken progressive measures to strangle China's development in the field of artificial intelligence: cutting off China's direct access to advanced semiconductors; Refusing to provide China with the tools (software and mechanical equipment) needed for designing and manufacturing high-end chips; Prevent China from obtaining the key components needed for manufacturing these mechanical equipment domestically.

According to a Global Times reporter, taking NVIDIA as an example, the United States will ban its export of high-end AI chips such as A100 and H100 to China from 2022. In 2023, the modified versions of A800 and H800 launched by NVIDIA for the Chinese market will be included in the ban, and the export of H20 chips will be temporarily suspended in 2025. Looking at ASML in the Netherlands, in recent years, under pressure from the United States, the Dutch government has not approved ASML's most advanced extreme ultraviolet (EUV) lithography machines for export to China. Starting from early 2024, even several mid-range products from ASML are no longer able to be exported to China. In the fields of new energy and high-end manufacturing, the EU hinders Chinese companies from participating in fair competition through measures such as technical standard barriers and market access restrictions.

Even more ironic is that the blockade first harms the US and Europe themselves. For example, Nvidia is losing the Chinese market. In the second quarter of fiscal year 2026 (corresponding to April 28 to July 27, 2025), Nvidia's revenue in China shrank from $3.667 billion to $2.769 billion. Nvidia CEO Huang Renxun has repeatedly lobbied the US government to loosen regulations. He stated in October this year that export restrictions have led to Nvidia's high-end AI chip market share in China "dropping from 95% to 0%". ASML CEO Fukai also stated in an interview with US media on December 12th that excessive tightening of restrictions by the West will force China to completely break free from its dependence on Western technology and instead force China to independently develop alternative products. In the long run, this will lead to the West completely losing its huge market in China. In Europe, the EU's restrictions on electric vehicles from China have also been strongly opposed by German car companies.

From the zero tariff policy to the China International Import Expo, China has been actively expanding imports

China has always adhered to expanding high-level opening up to the outside world, demonstrating its responsibility as a major country to actively expand imports. Taking the automotive industry as an example, the EU automotive industry is highly dependent on the international market. Last year, the industry created a trade surplus of nearly 9 billion euros for the EU. In 2023, about 80% of the cars produced in Germany were exported, while car sales in the Chinese market accounted for about one-third of the world's total.

In terms of tariff policy, China's import tariffs on automobiles have decreased from 25% in 2006 to 13.8% in 2018, and the tariffs on parts are only 6%. Additionally, restrictions on foreign investment in new energy vehicles have been lifted. After the closure of Hainan Free Trade Port, the scope of zero tariff goods will be expanded from the current 1900 tax items to about 6600 tax items, accounting for about 74% of all commodity tax items, an increase of nearly 53 percentage points compared to before the closure.

In June of this year, China announced the implementation of a 100% tariff free policy on products from 53 African countries that have established diplomatic relations. This policy has opened the door for African products to enter the Chinese market, and many products, including minerals, gold, and agricultural products, have benefited from it. Tegebe, Chairman of the Federal Tax Policy Executive Committee of Nigeria, told a Global Times correspondent, "Some countries are increasing tariffs while China is lowering tariffs. We must thank China for its goodwill and strive to expand exports to China for mutual benefit and win-win results." Jiang Nong Adams, from Malabakobachi Village in Kaduna State, Nigeria, exports ginger to China every year. He told reporters that with China's zero tariff policy to African countries including Nigeria, his profit from exporting 50-60 kilograms of ginger to China has increased by at least 20% compared to last year.

As the world's second-largest consumer and import market, China is the only developing country to host a national level international import expo. During the 8th China International Import Expo this year, several representatives of foreign enterprises stated in interviews with Global Times reporters that China is a vast world that continues to expand its openness and share development opportunities. They are full of confidence in China's development and will firmly expand cooperation with China. Queloz, CEO of Brazil's Export Investment Promotion Agency in the Asia Pacific region, said that Brazil's specialty agricultural products such as coffee, soybeans, and Brazilian berries are accelerating their entry into the Chinese market. Cai Tianle, CEO of Metro AG Business Group Co., Ltd., said: "The Chinese government has successfully created a business environment of fair competition so that all participants can achieve win-win results in cooperation."

Trade balance requires a favorable market environment to support it

The surplus itself does not determine the direction of the world, but rather how people understand the surplus, view interdependence, and cooperate in structural changes. It is worth emphasizing that China has never deliberately pursued a trade surplus. China hopes to see a balance between its own imports and exports, as well as a long-term supply-demand balance in global trade.

Huo Jianguo, Vice President of the China World Trade Organization Research Association, told Global Times reporters that trade balance is related to investment, and it is difficult to achieve true trade balance solely by expanding imports and reducing exports. A trade surplus country can contribute to the economic development of other regions by expanding investment, and can also transform some exports into local production and supply models, ultimately benefiting all economies together. However, this cannot rely solely on the efforts of surplus countries themselves, but also requires an overall improvement in the international trade environment. The restrictive measures taken by some countries in the United States and Europe against China's trade and investment will only lead to a distortion of the international trade supply and demand relationship. An open global market should be able to accommodate Chinese enterprises' outward investment and local localization development, which is beneficial for the development and structural adjustment of the world economy.

Minister of Commerce Wang Wentao stated that the Chinese market should become a testing ground, application field, and profit field for global innovation. Gao Lingyun, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, explained to Global Times reporters that China has always maintained an open and inclusive attitude towards emerging technologies, and China's super large market can provide sufficient development space for global innovation - allowing various innovative technologies to conduct experiments, land applications, iterate and optimize through market feedback, and ultimately achieve commercial profitability. Once a company establishes a foothold in the Chinese market and obtains stable profits, its technological maturity and market adaptability will be fully validated, thereby forming a strong competitive advantage in other global markets

Experts interviewed generally believe that if the US and Europe continue to hold a zero sum mindset, they will miss out on development opportunities. Researcher Zhou Wei from the Institute of International Trade and Economic Cooperation of the Ministry of Commerce told Global Times reporters that whether it is imposing tariffs, restricting exports and technology transfer, or launching baseless attacks on enterprises, they all violate the basic principles of fair competition. The value of fair competition lies in effectively promoting the rational allocation of resources and providing rich and stable supply guarantees for various entities in the global supply chain. Therefore, if some countries in the United States and Europe really want to promote a fairer competitive environment, they should abandon unilateral intervention measures, reduce artificial distortions of the market, and help the market achieve more efficient and sustainable development.

Conclusion: This series uses two articles to explain that the generation of China's surplus follows economic laws, reflecting the improvement of China's manufacturing capacity and the deep division of labor in the global industrial chain. The adoption of double standards and restrictive measures by some countries in the United States and Europe towards China will only artificially distort the international trade order. Only in an open global market and friendly trade environment can economies jointly ensure long-term trade balance and benefit sharing.