China-US Business Discord

China and the United States are in a row over intellectual property rights. The issue involves Chinese restrictions on the import and distribution of books, films, software and CDs. Though the World Trade Organisation has found Beijing to be in violation of international free trade rules, the latter says it may appeal the decision.

Published: Fri 14 Aug 2009, 11:56 PM

Last updated: Mon 6 Apr 2015, 12:28 AM

Washington, however, believes that the verdict promises a level-playing field for US companies struggling to distribute high-quality entertainment products in the mainland. Apart from the technical aspects of the discord, one thing is quite clear: both the economic giants are heading towards confrontation at a time when cooperation is required of them. But, regrettably, the ruling is unlikely to have an impact on the broader canvas of piracy, which they need to address to document a larger section of their otherwise informal economies.

It is obvious that China, the world’s largest growth engine, is likely to have complications with its trading partners. By virtue of being the largest manufacturer as well, Beijing, since its inclusion into the world trade body in 2001, has treaded a cautious path. Keeping in view fears that the WTO umbrella could jeopardise its businesses as foreign competitors crowd in, it has launched several complaints to keep other markets open to exports that drive its economy. China, by exhibiting largesse, has also entered into special bilateral agreements with many of its trading partners. This, however, hasn’t stopped its friends and allies from going to courts of law on intricate trade issues, as is evident from a host of pending petitions against Beijing.

But the good sign is that China says it is committed to international trade rules and will carry out its obligations under WTO procedures. This must be reassuring for many of the small and big economies that otherwise lack the muscles as well as the means to compete with the Asian production giant. The United States, which is one of China’s major trading partners, should look at the holistic picture of economy, and desist from rocking the boat on peripheral issues. Chest-thumping will not help, especially in an era fraught with recession and chaos. Washington can do better by learning a lesson or two from the fitness boom in Beijing. While the US is bogged down by the impact of its much-advertised stimulus package, China’s spending spree has soaked up demand for industrial output, giving relief to sectors hit by slowing exports.

What needs to be done is to further the process of negotiations – in the realms of trade and commerce, that too with a renewed spirit of coexistence. Personal rapport of world leaders can also help in addressing such discords, and see to it that they do not continue to jam the wheel of economy. It’s time to convert duels into deals.