On August 18, the U.S. officially launched an investigation into China’s trade policy on intellectual property under Section 301 of the Trade Act of 1974. On August 20 Xinhua published an analytical article on the “301 investigation.” As to the motive for the investigation, the article stated that it was because Trump wants to fulfill his campaign promise and solve the “so called” unbalanced trade issue. Also the U.S. is taking advantage of the length of the investigation, which may take between six months and one year, to further push China to open its market in service or high value-added industries. As to the impact of the investigation, the article quoted an expert who said that it is unlikely that a trade war between the U.S. and China will take place as the investigated products only account for a small portion of the total U.S. China trade and because the U.S. and China are heavily dependent on each other economically. It further quoted a source that said some believe that the investigation will hurt Chinese companies, their suppliers, and their sales agents, as well as the retail business in the U.S. Others said that China needs to be on the alert for the investigation having a chain effect because other countries may follow the same path. As to how China should react, the article stated that China should monitor the progress closely and use international rules to protect its own interests. According to one expert, in order to minimize the impact of a “301 investigation,” China should change itself from a “factory” into a “headquarters” that is equipped with the capability of doing research, manufacturing, and sales.
Source: Xinhua, August 20, 2017