Recently, U.S. President Barack Obama filed a lawsuit against the WTO, accusing China of export subsidies for automobiles and auto parts .
In response, Zhao Ying, a researcher at the Institute of Industrial Economics of the Chinese Academy of Social Sciences, said in an interview with reporters. “The Obama administration’s resumption of this topic is mainly due to political considerations or preparations for general elections.â€
Insiders believe that the Obama administration’s practice is not wise. Obama’s move may have little effect on saving the American auto industry, and it will also have a negative impact on China’s auto industry.
Sanctions for US election campaign
It is understood that with the approaching of the United States election day, the two major candidates, Obama and Romney, have continued to increase their attacks on each other, and one of the spearheads of mutual attacks is the Chinese issue. It was precisely because of this that Obama announced his decision to sue Chinese cars and parts when he spoke in an industrial-based speech in Ohio.
According to reports from Reuters, White House officials stated that the reason why the U.S. government wants to submit a bill to the WTO is because the United States hopes that China’s efforts to solve its subsidy issue will eventually fail, but China’s auto and parts and components industries have brought tremendous influences.
The official proposed that China’s move would put US companies in an unfavorable competitive position and encourage US companies to outsource more production to China; at the same time, between 2001 and 2010, the number of employees in the US auto parts industry was reduced by about half, and the United States from China during the same period Imported auto parts have increased by 7 times.
In March this year, there were 188 U.S. legislators joining the name: "As China has implemented multiple policies, it has created unequal trade advantages for auto parts makers. As a result, China's auto parts exports have grown rapidly, increasing by approximately 900% since 2000. ."
Zhao Ying thinks, “Obama’s intention is very obvious. It is to vote for the general election two months later, and also to honor his promise to revitalize the U.S. manufacturing industry.â€
According to the Xinhua News Agency, "The United States asked for consultations to provide funding, loans, abandon taxes that should be collected, provide goods and services, and other incentives related to the performance of auto and auto parts companies' exports."
Sanctions or sharp declines in exports
The friction between China and the United States on the automobile trade has been long-standing. From the tire special protection case in 2009 to this year's "double reverse" survey of steel wheels, it has continued for more than three years, and has brought about a certain impact on China's auto parts industry.
Chen Kangren, president of China Auto Parts Industry Corporation, told the Daily Economic News reporter that China’s advantage in exporting U.S. parts and components is mainly cost-effective. He analyzed that due to the appreciation of the renminbi against the US dollar in recent years, it has seriously affected the export volume of China's auto parts, and it has caused the already pitiful profit to drop again. "If the United States carries out another blockade and sanctions, China will trade with the United States. Exports will drop sharply."
It should be said that the successive sanctions imposed by the United States on the Chinese automobile and parts industries have undermined the development of China’s industry in the United States. However, whether the US’s auto parts exports to the United States threaten the development of relevant US industries is debatable.
Zhao Ying believes that although the scale of Chinese auto parts exports to the United States is very impressive, it does not necessarily affect the US auto industry.
“Because China exports relatively low-end products such as fasteners and tires, it mostly enters the maintenance market, while U.S. companies manufacture high-tech components and provide support for the original factory.
It should be said that China’s exports of auto parts to the United States are a useful complement to the US auto industry. Zhao Ying said.
From this, it is inferred that if the U.S. government's lawsuit against China's auto parts and components was filed, it would end in the United States. In the United States, many vehicle companies and maintenance companies need to find new suppliers. Whether or not they can achieve good cost-effectiveness is an unknown.
"China's exports of parts and components to the United States and even Japan are an inevitable result of the internationalization of the automotive industry and are the market's choice. The United States' sanctions against China's auto and parts industries are contrary to market rules," said Zhao Ying.
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