White Paper Refutes Ten Major Fallacies of the United States

On the 9th, the State Council Information Office released the white paper "China's Position on Several Issues in China-US Economic and Trade Relations," refuting ten fallacies from the US side. The key points are as follows: Fallacy 1: The US is at a disadvantage in China-US trade. The essence of China-US economic and trade relations is mutual benefit and win-win cooperation. In terms of goods trade, the growth rate of US exports to China has been significantly faster than its exports to the world. According to UN statistics, in 2024, the US export value to China reached $143.55 billion, an increase of 648.4% compared to $19.18 billion in 2001, far exceeding the 183.1% growth in US exports to the world during the same period. China is the largest export market for US soybeans and cotton, the second-largest export market for integrated circuits and coal, and the third-largest export market for medical devices, petroleum gas, and automobiles. The US is the largest source of China's service trade deficit, with the deficit scale showing an overall expanding trend. China's payments to the US for intellectual property rights have continued to grow. Overall, China-US economic and trade cooperation has created a large number of job opportunities for the US, generated substantial profits for US enterprises, and brought tangible benefits to US consumers. Fallacy 2: China has not seriously implemented the first phase of the China-US economic and trade agreement. The first phase of the China-US economic and trade agreement officially took effect on February 15, 2020. Recently, the US has repeatedly hyped that China's purchases have fallen short of expectations and that China has not fulfilled the agreement. In terms of goods trade, China has been actively fulfilling its commitments. However, in the process of implementation, China has faced multiple obstacles caused by the US side. For example, in 2018 and 2019, the most-traded Boeing model B737MAX experienced serious accidents such as crashes, leading to grounding measures in most countries, including China and the US, which significantly impacted aircraft trade. Another example is the insufficient US infrastructure, which has increased transportation costs. The cost of transporting US crude oil to China is twice that of the Middle East, making its international competitiveness relatively weak. Fallacy 3: China forces US companies to transfer technology. China firmly opposes any form of forced technology transfer. The US labels the voluntary contractual behavior of foreign-invested enterprises and Chinese enterprises cooperating to achieve commercial returns in the Chinese market as "forced technology transfer," which is inconsistent with the facts. China has taken multiple measures to protect trade secrets, pharmaceutical intellectual property rights, combat online infringement, and strengthen intellectual property law enforcement, earnestly fulfilling the commitments in the intellectual property chapter of the agreement. Fallacy 4: China engages in competitive currency devaluation. In recent years, the RMB exchange rate has remained basically stable at a reasonable and balanced level, and China's international payments have become more balanced. Since 2020, the RMB exchange rate index of the China Foreign Exchange Trade System, which measures the RMB against a basket of currencies, has generally operated around 100, maintaining relative strength among major international currencies, with no competitive devaluation. The annualized volatility of the RMB exchange rate has remained around 3% to 4%, roughly equivalent to the volatility of major international currencies. When assessing the RMB exchange rate, one should not only look at the exchange rate between the RMB and the US dollar. Fallacy 5: China has excess capacity. The so-called "China's excess capacity theory" is contrary to common sense and logic. From the perspective of market economy principles, supply and demand are two fundamental aspects of the internal relationship of a market economy. Supply-demand balance is short-term and relative, while imbalance is universal and dynamic. Using "excess capacity" as an excuse to restrict China's product exports and investment cooperation is blatant trade protectionism and artificial intervention and fragmentation of the global market. Fallacy 6: China discriminates against foreign enterprises in terms of policy preferences. In 2022, China issued an opinion on accelerating the construction of a unified national market, explicitly proposing to comprehensively clean up various preferential policies that discriminate against foreign-funded enterprises and local enterprises and implement local protection. There are three "equal treatments": equal tax treatment for domestic and foreign enterprises, equal treatment for imported and domestic goods, and equal treatment for individual income taxes of Chinese and foreign citizens. Fallacy 7: Most-favored-nation treatment is a US favor. Permanent normal trade relations status (i.e., permanent most-favored-nation treatment) is the core foundation of China-US economic and trade relations. Most-favored-nation treatment is a fundamental principle of the multilateral trading system. WTO rules require WTO members to unconditionally grant most-favored-nation treatment to other WTO members, and this requirement is legally binding. Granting most-favored-nation treatment is mutual and by no means a "favor" from the US. Fallacy 8: China's small parcels are a pipeline for exporting fentanyl substances to the US. In February and March 2025, the US imposed comprehensive tariff hikes on Chinese products exported to the US, citing fentanyl and other issues, and threatened to cancel the duty-free policy for small parcels from China. On April 2, the US announced that it would cancel the duty-free policy for small parcels from China starting May 2. China is one of the countries with the strictest and most thorough drug control policies in the world, implementing strict controls on the production, operation, use, and export of such substances. To date, no cases of such drugs being lost in the production or circulation process have been found. Fallacy 9: The duty-free policy for small parcels may impact domestic industries. Consumers purchasing personal items from abroad is a beneficial supplement to personal consumption. Although the import value of global retail parcels has grown rapidly in recent years, the overall scale remains relatively limited, accounting for a relatively small proportion of global trade and total retail sales, far from a dominant position. If the duty-free policy for small parcels is canceled, inspecting and taxing each small parcel individually will bring huge regulatory costs and significantly increase logistics and customs clearance costs for enterprises. Fallacy 10: TikTok and others harm US national security. The US government has continuously politicized economic and trade issues under the pretext of national security, introducing various economic and trade restriction policies and measures. For example, under the so-called "protection of US national security," it has forced TikTok to sell or divest, interfering with the normal operation of enterprises and threatening the technical security and commercial interests of investors. The US's various actions are entirely about suppression and containment under the guise of national security and human rights. The US has adopted discriminatory control measures on artificial intelligence models and integrated circuits that provide underlying computing power, essentially creating a hierarchy in the field of artificial intelligence and depriving developing countries, including China, of the right to achieve technological progress.