Abstract: Recently, the China Finance 40 Forum and the China Center for International Economic Exchanges jointly hosted the 6th Bund Summit, where a closed-door seminar was held on Industrial Policy, Trade Conflict and Global Cooperation.
International experts noted that trade has always been a sensitive issue in the United States. When facing strong competitors such as China, politicians tend to politicize trade issues by exploiting the public's misunderstandings about trade. Regarding China's industrial policy, the main concern in the U.S. is that subsidies to certain industries might crowd out resources from other sectors, posing risks of inefficiency and market distortion. European experts stated that the current geopolitical environment makes industrial policies discriminatory, and Europe and other countries might actually benefit from major powers' trade conflicts.
Industrial policy can lead to both positive and negative spillover effects. It might promote reasonable policy objectives and drive competition and technological progress, but excessive or inappropriate industrial policies can also lead to resource misallocation and loss of social welfare. The experts agreed that countries should learn from history to protect the global trade system. WTO reform needs to be depoliticized to some extent, emphasizing dialogue and cooperation; industrial policies should avoid market distortions and the increase of trade barriers; in the context of insufficient carbon tax efforts, countries can substitute tariff policies by subsidizing new energy vehicles.
