Trade disputes are normal in international economic relations. For the China-US trade dispute, it is a misunderstanding that the policies of the United States reflect its grand strategy toward China.

But will the China-US competition be a zero-sum game? And will the dispute be disastrous? On the one hand, China has integrated into the global supply chain and is committed to the global trade rules. With that, it has achieved large technological advancements.

On the other hand, China's economy is already 60 percent that of the US, and it keeps growing.

And the real impacts of the trade dispute on the Chinese economy are limited. China's exports to the US account for 16 percent of its total exports. The 10 percent decline in China's exports to the US in the first two quarters of 2019 only account for 1.6 percent of China's total exports during that period.

In the meantime, China's pace of reform has not stopped. Specifically, the Chinese government has released several policies for an open financial market. And in 2019, the National People's Congress, China's top legislature, approved the updated Foreign Investment Law that will come into effect on Jan 1 next year.

So, decoupling is not likely to happen. The US may not be as open to Chinese enterprises as before, fearing they will acquire its technology through mergers and acquisitions. But the international supply chains of high-tech industries will not be interrupted.

Even if decoupling did happen, it would damage the US economy more than China's. While China would have to spend more on research and development, the US would lose the market shares and the advantages that it has accumulated over the years.

China is becoming a global leader, and it should not decouple either. Self-reliance in the planning era was costly although it brought technological progress. China should stay cool-minded and search for technological progress in an open and integrated world.

A world system that is open and integrated creates a favorable environment for China to achieve its goals, especially in the advancement of technology.

The trade dispute between China and the US is not as disastrous as imagined. The two countries can have a normal relationship characterized by cooperation as well as competition.

China needs US agricultural products, natural gas and airplanes. Also, cultural exchanges are beneficial to both as the information and technology flows can produce mutual fruits.

Take the hi-tech giants Huawei, Baidu, Alibaba and Tencent as examples. They are China's leading technological companies and their exchanges with the US facilitate learning between the two sides.

Additionally, China and the US can build up their partnership in global arenas such as the World Trade Organization, international aid and even the Belt and Road Initiative.

China should proactively use multilateral mechanisms to respond to the pressures from the US. The Organization for Economic Cooperation and Development (OECD) sets a good example for multilateral mechanisms. It is a club of rich countries. It is a knowledge bank, instead of an organization that makes decisions. It creates knowledge and best practices that are first applied to member countries, and then promoted in other countries.

The Asian Infrastructure Investment Bank also does a good job in being committed to multilateral mechanisms. Its members include the United Kingdom and other European countries.

This gives hints for the future direction of the initiative. If it could develop a multilateral steering mechanism, the initiative would gain more trust.

One option is to create an organization like OECD to create best practices for developing countries. With that, the Belt and Road Initiative would become a multilateral mechanism by which member countries can develop and share best practices.

The US has accused China of not fulfilling its obligations in the World Trade Organization. However, 10 years after China's entry, the WTO released a report showing that China has realized most of its promises. China should make two further changes.

China has benefited tremendously under the framework of the WTO and become the secondlargest economy in the world, exerting a large influence on the world.

It is time China took its global responsibility to a higher level. For instance, China should take a more active role in WTO reform.

In addition, adopting competitive neutrality as a rule for regulating State-owned enterprises will gain support from European countries as well as Australia and Japan because it is a rule promoted by the OECD.

The author is professor and dean of the National School of Development of Peking University.

The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.

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