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Growing Mistrust
Cover Stories Series 2012> Growing Mistrust
UPDATED: October 22, 2012 NO. 43 OCTOBER 25, 2012
Dangers of Trade Protectionism

In the name of "national security," U.S. politicians have tried to block Huawei and ZTE, two of China's major private telecom firms, from entering the U.S. market. This triggered concerns that trade protectionism could affect the development of the free market economy around the world.

The Chinese economy is now an integral part of the global economy. Companies from around the world are competing and developing freely in the Chinese market, including U.S. telecom equipment manufacturers.

The United States has long considered itself a driver of the free economy. But when Chinese companies want to enter the U.S. market, U.S. politicians change their tune. Resistance from U.S. politicians will halt the pace of economic globalization and will decelerate the global economic recovery.

Surely, American economists are very familiar with the economic crisis that occurred in the 1920s and 1930s. Following that crisis, Western countries adopted trade protectionism. As a result, they drove the global economy into a long period of depression, ending the golden era of economic globalization. Even today, some economists are blaming Western countries' trade protectionism for worsening the economic depression.

It's a shame that American politicians are refusing to learn from the past.

Do these two Chinese firms really pose a threat to the national security of the United States? This is not the case. The so-called "security threat" is a mere allegation by those in U.S. Congress, not by technical experts. Compared with China, America has much more developed networking and telecom technologies. If any security threat exists, it's highly unlikely for them to go undetected by American technical personnel. If Chinese telecom products were found to pose a threat to U.S. national security, those politicians would have already pounced on the issue. But in fact, the U.S. report fails to spell out any specific examples of security threats.

These U.S. political fears can be likened to an outdated Cold War mentality.

Huawei and ZTE represent a symbolic phenomenon, wherein developing countries are trying to secure a foothold in the hi-tech market of technologically advanced countries. This has caused discomfort to developed countries like the United States, which have been playing a dominant role in this regard.

Trade protectionism is harmful to China and does little good for the United States. While causing trouble for Chinese companies, it also damages U.S. businesses, casting a shadow on its commercial environment. Acting too aggressively to block foreign companies' market entry and being overly cautious will only cause the United States to lose business opportunities and miss out on a chance to boost its domestic economy and employment.

Economic globalization demands that all countries open their market to the outside world on an equal footing. Against the backdrop of a world economic recession, we should be alert to the threats posed by trade protectionism to economic globalization and the world economic recovery.

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