context: Against rising trade war and tariff shocks with the US, PRC experts and officials have doubled down on the strategy of 'doing our own thing well', i.e. building resilience by unlocking domestic demand and opening up its market to ‘recouple’ with the world. As tensions escalate, some PRC commentators advise Beijing to adopt more drastic measures, not least in retaliations but also in hastening the scope of opening up. The ‘three zeros’ (zero tariffs, zero trade barriers and zero subsidies) strategy mentioned in this commentary was highlighted back in the earlier Trans-Pacific Partnership era in 2019 by Huang Qifan 黄奇帆 PRC veteran economist.
In a China Macroeconomic Forum seminar on 9 April 2025, Xing Ziqiang 邢自强 Morgan Stanley China chief economist proposes the PRC adopt the 'three zeros' strategy
- by 2030
- drop tariffs on non-US countries to zero
- slash all market access limitations for FDI and private firms
- remove all industry subsidies
- raise domestic consumption by 30 percent (some three US$1 tn) to fill the gap left by US tariffs
- reach this via reforming social security, education and public welfare to boost domestic demand
Xing shares his insights on the latest trade war situation
- the PRC has demonstrated its courage in retaliating against the US, now the priority is to make breakthroughs with wisdom and strategy
- stimulus policies need to be implemented quickly to respond to tariff shocks
- this should be done ahead of April and May trade data
- the current shocks are unprecedented and are comparable to the global financial crisis after the Lehman Brothers' collapse in September 2008
- Beijing needs to act swiftly as the confidence of the global financial markets does not wait for anyone
Liu Yuhui 刘煜辉 PRC economist notes that the best strategy against tariff war is a 'zero-tariff' strategy is for Beijing to formulate a 'zero-tariff alliance' to encircle the US.
Ju Jiandong 鞠建东 Tsinghua University PBC School of Finance chair professor notes that as PRC–US rivalry heats up, both sides are seeking to form alliances. With Washington already reportedly planning to erect an international tariff wall to exclude the PRC, Ju notes that Beijing needs to act quickly to build its 'circle of friends' to break through US restrictions.