China's ideology is deeply influenced by Marxism-Leninism, adapted under the concept of "socialism with Chinese characteristics," which refers to a mix of planned and market economy, guided by the control of the Chinese Communist Party (CCP). This ideology holds that the government should play a central role in the economy, guiding economic development and redistribution, but also allowing elements of free market and private ownership, albeit under state surveillance.
In contrast, the West, particularly the more advanced economies such as the United States and the European Union, tend to embrace a more liberal economy, based on the principles of free markets, capitalism, and a more limited role for the state in the economy, with an emphasis on the protection of private property, competition, and economic globalization with open and predictable rules.
Differences between China and the West in international trade:
1. Interventionism vs. Free Market:
China promotes a system in which the state controls strategic sectors such as telecommunications, infrastructure, and advanced technologies, while the West advocates market liberalization and open competition, limiting government intervention. This creates tensions when Chinese companies, supported by subsidies or state control, compete in global markets with Western companies that do not enjoy the same benefits.
2. Intellectual Property Protection:
The West has accused China of poor practices in protecting intellectual property, pointing to technology theft or requiring technology transfers from foreign companies wishing to operate in China. Disputes over patents and intellectual property have been a continuing source of friction.
3. Unfair Trade Practices:
Western countries, especially the US, have accused China of dumping (selling products below cost to crowd out competitors) and currency manipulation, arguing that it artificially keeps the value of its currency low to make its exports more competitive in the global market.
4. State Subsidies:
The Chinese government’s financial support for its companies, especially in strategic sectors such as technology, has been a point of contention. Western countries argue that these subsidies distort markets and create unfair competition for companies that do not receive the same level of state support.
Examples of current problems:
1. US-China trade war:
Beginning in 2018, the United States imposed tariffs on billions of dollars worth of Chinese goods, alleging unfair trade practices including forced technology transfer and intellectual property theft. China responded with tariffs on American goods, affecting sectors such as agriculture. Although both countries have signed partial agreements, tensions remain high.
2. Technological restrictions:
The US has limited Chinese companies, such as Huawei and TikTok, from accessing US technology, citing national security concerns. These restrictions are linked to mistrust over how the Chinese government could use tech companies to spy or collect data.
3. WTO disputes:
China and several Western countries have clashed within the World Trade Organization (WTO) over subsidy policies and unfair competition practices. Western countries accuse China of taking advantage of global trade rules without fully complying with them, while China claims it is discriminated against in multilateral bodies.
4. Belt and Road Initiative (BRI):
China's Belt and Road Initiative has been seen in the West as a geopolitical tool to expand Chinese influence by investing in infrastructure in developing countries. Some Western countries see the BRI as a means for China to gain political and economic influence, while others criticise that it may lead recipient countries into unsustainable debt.
In short, the differences between China and the West in international trade revolve around ideological differences over the role of the state in the economy, fair trade practices, intellectual property protection, and competition in strategic sectors. These differences have led to trade conflicts and tensions that continue to shape the relationship between the two powers.
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