| Summary/Abstract |
Neither the Chinese nor US economic systems will fundamentally change as a result of overt trade conflict. The challenge for policy‐relevant economics is to design a regime for China–US commerce that accepts the co‐existence but also addresses underlying disputes. Many important China–US disputes, notably those over intellectual property protection and state subsidies, cannot be resolved by the World Trade Organization, thus new institutions must be built. Economics‐based regime principles should entail recognition that: the China–US bilateral trade imbalance is unique mainly because of macroeconomic and financial factors, not trade; agreements should restrict commercial and government behaviors, not target economic outcomes; Chinese companies must compete and be allowed to succeed in any sector, including high‐technology; China is not entitled to US‐owned technology, thus intellectual property rights must be enforced; and the US Government should support an increased role for China in global economic governance.
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