Weijian Shan
108 μ¢¤³£ ¬μμ¬
However, the government-controlled sector remains too big, ine-
cient, wasteful, and moribund, more o a bane than a boon to the econ-
omy. It is also a source o growing friction between China and the West,
which fears, with good reason, that Chinese government subsidies and
support unfairly advantage state-owned Ärms. This arrangement needs
to change, both for China and for its trading partners.
China can maintain its economic momentum only by structurally
reforming its economy to move in the direction o a freer, more open
market. I it fails to do so, its growth will hit a ceiling and its rise will
be curtailed. U.S. negotiators should push China to further trim its
state-owned sector, to guarantee equal access to its market for trade
and investment, and to develop a better regime o intellectual prop-
erty protection. These measures would accelerate the trajectory o
reform that China embarked on 40 years ago, which has led to the
rise o a vibrant private sector in China and the country’s economic
integration with the global market. Speeding up this process will not
be painless and will be resisted by vested interests in China. But such
changes will beneÄt China as well as its trading partners, including
the United States. Beijing and Washington should share these objec-
tives in their trade negotiations. I they succeed in meeting these
goals, both sides will win the trade war.
It is in the best interests o both countries to move away from zero-
sum thinking and put an end to the ad hoc decoupling that the trade
war has threatened. The best path forward is not to close but to tear
down existing barriers and further open up trade. To maintain its global
primacy and technological leadership, the United States needs China—
the biggest and fastest-growing consumer market in the world. To sus-
tain the momentum o its economic ascent, China needs to further its
reforms and continue opening up to the world market. Ultimately, a
mix o cooperation and competition within a rules-based system will
lead to the greatest prosperity for both countries and for the world
economy, as all trading nations have learned throughout history.∂