中文
Merdeka 118, the venue for the China-U.S. economic and trade talks, in Kuala Lumpur, Malaysia, October 25, 2025. [Photo/Xinhua]
By Liu Chunsheng
"China and the U.S. held candid, in-depth and constructive exchanges and consultations on relevant issues and reached a preliminary consensus," said Li Chenggang, China's international trade representative with the Ministry of Commerce and Vice Minister of Commerce. According to reports, the topics discussed between China and the United States included the U.S. Section 301 measures targeting China's maritime, logistics and shipbuilding sectors, the extension of tariff suspensions on a reciprocal basis, and tariffs related to fentanyl, among others.
This dialogue takes place at a critical inflection point for the global economy, a moment of profound structural change. The discussions in these conference rooms have transcended mere bilateral disputes; they have become a barometer for the health and direction of the world economy.
A growing body of research reveals the self-defeating nature of the tariff policies enacted by the U.S. since 2018. Contrary to the intended protection of domestic industries, these measures have functioned as a regressive tax on American consumers.
Studies, including those from the Peterson Institute for International Economics, indicate that the tariffs have led to a significant increase in annual household expenditures. The cost pass-through is particularly acute in sectors like automotive parts and consumer electronics, where supply chains are deeply intertwined with Chinese manufacturing.
Furthermore, these artificial price hikes on a wide range of imported goods have complicated the Federal Reserve's battle against inflation, interfering with the intended pace and efficacy of its interest rate adjustments.
The repercussions are equally stark on the other side of the Pacific. China's pivot to alternative soybean suppliers in Brazil and Argentina has left American farmers reeling from the loss of their largest export market. It exposes the fundamental limitation of unilateralism in an age defined by intricately connected global value chains. Attempting to weaponize interdependence in a globalized world inevitably triggers blowback, harming the very nation that initiates the conflict.
The struggle over two critical strategic resources, semiconductors and rare earths, highlights a paradoxical restructuring of global supply chains. The U.S. restrictions on advanced chip exports to China were designed to curb the latter's high-tech advancement. In the short term, they have indeed presented challenges to some extent. However, they have also inadvertently acted as a powerful catalyst, accelerating China's drive toward self-sufficiency and the maturation of its domestic semiconductor ecosystem. Investment in domestic chip production capacity has surged, with notable progress in mature-node technologies.
Meanwhile, American semiconductor companies are grappling with the consequences of being sidelined from the world's largest market for chip consumption, leading to potential long-term erosion in revenue that could, in turn, constrain future research and development cycles.
The rare earths sector presents a mirror image of this dependency. While China may not monopolize raw rare-earth ore, it commands an overwhelming share, estimated at around 90 percent, of the global capacity for refining these elements into the high-purity materials essential for modern technologies, from electric vehicles to advanced weapons systems.
Despite efforts in the U.S. to revive mining operations, the lack of parallel scaling in sophisticated processing capabilities creates a critical vulnerability. This mutually nested industrial ecosystem demonstrates a fundamental truth: The modern industrial system is, by its very nature, a community of shared destiny.
The International Monetary Fund has consistently flagged the "U.S.-China trade relationship" as a primary risk variable in its World Economic Outlook report. Its analyses warn that an escalation of tariff disputes could lead to massive losses in global GDP, potentially running into trillions of dollars, while simultaneously heightening financial instability risks across emerging markets.
The damage extends beyond immediate financial metrics. The protectionist impulse is fueling a dangerous fragmentation of the global trade rulebook, systematically eroding the foundations of the multilateral system that has underpinned prosperity for decades. With the World Trade Organization struggling to modernize and remain relevant, the world is witnessing the accelerated formation of rival regional blocs.
Historical experience underscores the inherent complementarity of the American and Chinese economies. China's manufacturing prowess lies in its unparalleled ecosystem of integrated supply chains and scale efficiency. America's strength emanates from its frontier innovation, technological breakthroughs and powerful brand equity.
The resounding success of Tesla's Gigafactory in Shanghai stands as a testament to this powerful synergy: The fusion of American technology and Chinese manufacturing capability creates a combined effect greater than the sum of its parts. Similarly, a significant portion of Boeing's commercial aircraft deliveries are dependent on the Chinese aviation market, which sheds light on a deep, structural interdependence that cannot be easily severed without causing severe damage to both sides.
The potential for constructive collaboration becomes even more compelling when we consider transnational challenges that respect no borders. In combating climate change, China's dominance in solar panel production complements American advancements in energy storage technology, creating a perfect partnership to drive the green energy transition.
In establishing guardrails for the age of artificial intelligence, the input and cooperation of both technological superpowers are indispensable for creating safe and ethical global standards. These areas, which inherently transcend a zero-sum mindset, represent the most fertile ground for rebuilding shattered trust and forging a more stable foundation for the relationship.
Malaysian negotiations may shine a light on the precarious path ahead for the global economy. The choice before the world's two largest economies is a stark one, encapsulated in the timeless wisdom – "Wise people build bridges; foolish people build walls."
In our contemporary era, where the concept of a shared future for humanity is gaining ever-greater resonance, the principle that "cooperation benefits both, while confrontation harms both" is more than just ancient Eastern philosophy. It is an inescapable, pragmatic imperative for effective global economic governance. The bridges built today, however tentative, will determine the prosperity and stability of tomorrow.
Liu Chunsheng, a special commentator on current affairs for CGTN, is an associate professor at the Beijing-based Central University of Finance and Economics.
