The US could boost the economies of China and other developing countries, which could help the world’s second-largest economy improve its international standing, according to a new report by the American Enterprise Institute.
The report, titled The China Economy and the Future, was issued Monday and lays out five “big picture” areas where the US should support China, which include bolstering the US’s economy and jobs, promoting the US-China relationship, strengthening the bilateral trade relationship, and developing the US economic relationship with other countries.
The US and China have had a difficult relationship, with US President Donald Trump recently calling for a trade war with China over trade and military issues.
But China has done little to help US manufacturing, which is currently the dominant manufacturing sector of the world economy.
So far, US manufacturers have largely seen their factories remain closed due to the impact of the Paris Climate Accord, while Chinese companies are ramping up their efforts to develop their own technologies.
“We should be very, very, careful about whether the US supports China because if it does, then it’s going to have a huge negative impact on the overall US economy,” said Michael T. D’Antonio, the institute’s chief economist.
“The Chinese have been doing things that are pretty good.
But they’ve done so largely through government subsidies.
So that would make it a very big problem for US businesses.”
To make the US economy more attractive, the US government should provide more incentives to US companies to expand and hire in China, according the report, which comes on the heels of President Donald J. Trump’s visit to Beijing in May.
The study recommends that the US and other developed countries fund economic development programs, promote bilateral trade agreements, and create a framework for economic cooperation between the two countries.
It recommends a “special envoy” for economic development between the US, China, and other countries be created and that the State Department create a policy on “business opportunities” between the three countries.
The report also recommends the US make sure that US companies are allowed to work on Chinese infrastructure projects and encourage foreign companies to invest in China.
“If we want China to continue to be the top economic power, then we need to make sure it’s not a top economic partner,” said Dan Krosz, an associate professor of economics at George Mason University and the author of the report.
“The best way to do that is to make China a top-tier economic partner.”
The US should also work with other developing nations to provide a new kind of infrastructure, such as solar and wind power, which can compete with fossil fuels and other technologies, he said.
“China is a major source of new energy, so there’s no reason why the US shouldn’t be doing more to support that, and encourage that,” Kroswowski said.
“It’s a really good idea to do so.”
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