On June 19, the White House issued a report entitled How China’s Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World. The report says that China has experienced rapid economic growth to become the world’s second-largest economy, but this growth has been achieved in significant part through aggressive acts and policies, which can be called, collectively, economic aggression.

International law does not define what economic aggression is. However, the United States used "aggression" to define another country's economic practices, which is rare in history after World War II. This article will discuss what economic aggression is, in response to the White House report, with reference to the basics of international law. The writer will point out that China is a contributor to the world economy, not an aggressor. In contrast, The US launched a trade war to curb China's economic development, which is a real economic aggression.

The White House report failed to give a clear definition of economic aggression

The White House report begins with four categories of China's economic aggression: (1) protecting domestic market; (2) expanding China’s share of global market; (3) securing and controlling core natural resources globally; (4) dominating traditional manufacturing industries.

The report alleges that the so-called economic aggression has been carried out through: physical and cyber-enabled theft of technologies and intellectual properties; the evasion of U.S. export control laws by counterfeiting, piracy and reverse engineering; systematically harvesting public information and technical achievements; and deploying Chinese students and visiting scholars as technology spies.

I was born in Jilin province, which was once under Japanese control with a puppet regime called Manchukuo. As far as I know, aggression is relevant to armed occupation of sovereignty. At that time, Japan also established a colonial economic system covering industries and agriculture, to serve the needs of Japan's domestic economic development. They drained the resources in Northeast China through plundering, smuggling and low-price acquisition. Thus, the Northeast China lost its economic sovereignty, with the people suffering from ruthless exploitation.

In 1945, the International Military Tribunal trialed the aggressor countries including Japan. At that time, the Chief US Prosecutor Robert H. Jackson said, “to initiate a war of aggression, therefore, is not only an international crime; it is the supreme international crime differing only from other war crimes in that it contains within itself the accumulated evil of the whole”.

From the perspective of international law, the United Nations has discussed and defined aggression. In December 1974, the UN General Assembly adopted the Resolution 3314, which defined aggression, but did not mention economic aggression. In 1960s, Cuba asserted that US’ economic blockade was an economic aggression. However, so far, there is no explicit definition about economic aggression in international law.

The Trump administration released the first ever report on economic aggression after the World War II, but the report does not define what economic aggression is, nor does it explain which international law it has referred to. Hereby, I want to tell the White House what economic aggression is.

First of all, the report claimed China's protection of the domestic market is aggression. However, under the banner of “America First”, US President Donald Trump imposed extra, high protective tariffs on not a few countries including China. Is it aggression? The US forced other countries to subordinate their own interests to those of the US. Isn’t it economic aggressive?

Second, the report said that China's expansion of global market share is aggression. Occupying the high end of the global value chain, the US possesses advantages of global goods and services trade. Is it economic aggression? In fact, opening up the global market is a normal appeal for any stakeholder of international trade. When US capital flowed to every corner of the world, did the US say it was aggression?

Third, the report criticized that controlling core natural resources globally is aggression. What does control mean? China indeed has a slew of traditional manufacturing industries, but it never controlled them. If China purchasing resource products through normal trade is aggression, what about the US controlling Middle East oil by overthrowing other countries' governments? This is a real economic aggression.

Fourth, the report says that China dominating traditional manufacturing industry is economic aggression. China does possess many traditional manufacturing industries, but it’s different from domination. On the other hand, the US boasts and exerts strict control on its high-end technology industries. According to the US’ logic, is it economic aggression?

Last but not least, the specific methods of economic aggression listed in the report didn’t constitute an act of aggression. These activities can be regulated within the existing legal framework of the WTO. The US does not bother to label an economic activity with “economic aggression”, since the WTO has not yet defined what economic aggression is.

How should we define economic aggression?

International law, especially the WTO rules, are based on concrete logic and methodologies in legislation. For example, when defining dumping, it should define the subject of dumping, the act of the subject and the consequences of the act (for example, the extent of damage to others). According to this criteria, the followings should be carefully considered if defining economic aggression:

First, the subject of the act is clear. In the White House report, there are complaints against Chinese government and enterprises, but also accusation against scholars and students. It is a mixture of subjects. At present, in the international academic discussion on aggression, the identification of the subject of aggression is mostly limited to the state.

Second, the act is aggressive. The International Military Tribunal and the UN Charter defined aggression as trampling sovereignty. National sovereignty includes economic sovereignty, which refers to the highest and independent jurisdiction over its own economy. The key of economic aggression is the violation of other countries’ economic sovereignty.

Third, the act has political characteristics. The international economic laws including the WTO rules have clear definitions on tariffs, economic embargoes, boycotts, dumping, and freezing of assets. The existing laws basically regulate the acts in international economic and trade activities. In other words, all concerning issues in the Sino-US trade war could be resolved within the existing international law system. I believe, “aggression” is a political act, which, if insisting on using it in economic field, can only apply to extreme economic acts with clear political purpose such as blockade.

Fourth, the consequences are aggressive, with highest-level damages. The highest level should refer to destruction of a country's economic capacity or destroying a country's economic system. The WTO rules, widely recognized as a good legal system, have never used “aggressive” -- usually “damage” -- to define the consequences of a trade policy.

Fifth, the legality of the act should be identified before defining the aggressiveness. For example, does expanding global market share violate the international law? If does, other countries cannot counterattack by using the same method.

Based on the aforementioned analysis, I attempt to give a definition to economic aggression as follows: Economic aggression is a violation of international law, mainly by taking political acts that infringe the economic sovereignty of other countries and cause serious damage.

Final question in reply

Statistics show that China’s average contribution to world economic growth since its accession to the WTO is close to 30 percent. During the international financial crisis, China insisted on safeguarding the renminbi from depreciation, playing a key role of stabilizing and driving world economy. Therefore, China is a contributor, not an aggressor.

When the White House labeled China with “economic aggressor”, please explain what the "America First" mean, and why the trade protectionism prevailed in the US recently; please explain why American multinationals sought and hired cheap laborers around the world to reap the most lucrative benefits in the global value chain; please explain why the US government tightened control on global financial system and global oil market.

The White House really needs to clarify the connotation of economic aggression. Otherwise, it is very likely to work for its own destruction.

Here is my final question: Is it economic aggression when the US blatantly alleged in its report that China's economic rise should be fundamentally curbed? In my point of view, curbing other country’s economic development is economic aggression, interfering with other countries’ economic sovereignty is economic aggression, and launching a trade war, like the US did, is economic aggression.

Cheng Dawei is a research fellow with National Academy of Development and Strategy and a professor of School of Economics, Renmin University of China. The views expressed do not necessarily reflect those of China Watch.

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