Pan Xiaoming & Chen Jiawen

The US National Security Strategy unveiled by President Donald Trump in December 2017 raised the United States' economic security to the level of national security. The strategy not only reflects the priority of the country's economic strength in the Trump administration's agenda, but also, to a larger extent, reveals Trump's tendency to take an absolute approach to US national interests in the international economic order. The adoption of an economic security strategy marks a major adjustment of US international economic policy, whose framework began to take shape just a few months after the strategy was put forward.With the implementation of relevant policies, it will have a far-reaching impact on the integration of the world economy and China-US bilateral cooperation.

Characteristics of Trump's Economic Security Strategy

Although Trump claimed his National Security Strategy report as “the first time, American strategy recognizes that economic security is national security,”1The White House, “Remarks by President Trump on the Administration's National Security Strategy,”December 18, 2017, https://www.whitehouse.gov/briefings-statements/remarks-president-trump-administrations-national-security-strategy.in fact, early at the end of World War II, the US government had recognized the close relationship between economic security and national security.2James Chace, “Вretton Woods II?” Wоrld Pоl(xiāng)iсу Jоurnаl, Vol.15, No.1, Spring 1998, p.115.Then US Presidents fully implemented Adam Smith's concept of “trade peace,”3Adam Smith, Тhе Wеаlth оf Nаtiоns, Вontam Classics, 2003, p.873.making it the United States' post-war economic policy focus to expand market access and promote free trade. While during the Cold War, due to the US-Soviet confrontation, the US understood national security more in terms of military and national defense,4Helen E. S. Nesadurai, “Introduction: Economic Security, Globalization and Governance,” Тhе Pасifiс Rеviеw, Vol.17, No.4, 2004, p.462.it has rediscovered the important role of economic factors in identifying and achieving national security goals after the disintegration of the Soviet Union,5Carl R. Neu and Charles Wolf, Jr., Тhе Eсоnоmiс Dimеnsiоns оf Nаtiоnаl Sесuritу, RAND, 1994, p.iii.recognizing that “national security includes not only the political independence and territorial integrity of a country but also the power of free access to the international market and investment.”6Benjamin O. Fordham, Вuilding thе Соl(xiāng)d Wаr Соnsеnsus: Тhе Pоl(xiāng)itiсаl Eсоnоmу оf U.S. Nаtiоnаl Sесuritу Pоl(xiāng)iсу 1949-51, University of Michigan Press, 1998, p.10.Trump's economic security strategy has inherited the attention given to economic policy by successive post-war US administrations, and presented new features guided by the concept of“America First.”

Economic prosperity as important pillar of national security

The National Security Strategy raises the goal of achieving the United States' economic prosperity and maintaining its absolute economic superiority to the level of national security, explicitly stating that economic security is national security, and economic strength has always been the foundation of US global leadership. The strategy directly pointed to problems facing US economy, such as “risk-aversion and regulations replaced investment and entrepreneurship,” “anemic growth in real earnings for American workers” and growing trade deficit, emphasizing that rebuilding economic strength and restoring confidence in the American economic model are priorities for US economic security at the domestic level.7The White House, Nаtiоnаl Sесuritу Strаtеgу оf thе Unitеd Stаtеs оf Аmеriса, December 2017, p.17.In the view of the Trump administration, “preserving a fair and reciprocal international economic system will enhance our security,” and“a growing and innovative economy allows the United States to maintain the world's most powerful military and protect our homeland.”8Ibid., pp.17-18.At the same time, the strategy holds that “American prosperity and security are challenged by an economic competition playing out in a broader strategic context,” and China and Russia were explicitly labeled as competitors who“challenge American power, influence, and interests … determined to make economies less free and less fair, to grow their militaries, and to … expand their influence.”9Ibid., p.2.The United States “must work with like-minded allies and partners to ensure our principles prevail and the rules are enforced so that our economies prosper,” which “makes America more secure and advances American influence in the world.”10Ibid., pp.17-18.

Technological innovation and energy industrial advantage as foundation for economic security

Technological innovation and an advantageous position in the energy industry are the engines for sustained US world leadership and the key factors that affect the long-term core competitiveness and the status of the United States in the world. The 2008 financial crisis had a profound and devastating impact on US economy. Although most businesses in the US are still at the high end of the value chain and enjoy the biggest proportion of a product's profits, China's rapid rise in the fields of electronic payment, cloud computing and artificial intelligence(AI)11“America vs. China: The Вattle for Digital Supremacy,” Тhе Eсоnоmist, March 2018, p.11.poses challenges to the absolute superiority of US technological innovation. Therefore, the Trump administration regards strengthening technological innovation as one important aspect of maintaining US economic security. At the same time, the administration highlights energy independence and believes that domestic energy production is in the national interests of the United States; it advocates the development of clean fossil energy and promotes the reduction of energy costs, thus reducing the cost of US economy.12Jim Lakely, “An America First Energy Plan,” January 11, 2018, https://www.heartland.org/publicationsresources/publications/an-america-first-energy-plan.Proceeding from economic security,the Trump administration has stressed the significance of promoting technological innovation and developing the energy industry for the country's economic growth and global leadership.

Reinforcing US dominance in international economic order

The Trump administration takes a zero-sum approach to the relationship with other countries, believing that there cannot be economic winners without losers, and each country must fend for itself.13Martin Sandbu, “The Вattles of Ideology That Will Define Our Age,” Finаnсiаl Тimеs, December 28,2017, https://www.ft.com/content/8417bd56-e658-11e7-8b99-0191e45377ec.Former US National Security Adviser H. R. McMaster and former Director of the National Economic Council Gary Cohn made poignant remarks that “the world is not a ‘global community' but an arena where nations, nongovernmental actors and businesses engage and compete for advantage.”14Herbert R. McMaster and Gary D. Cohn, “America First Doesn't Mean America Alone,” Wаll Strееt Jоurnаl, May 30, 2017, https://www.wsj.com/articles/america-first-doesnt-mean-america-alone-1496187426.Before the National Security Strategy singled out China and Russia, many American scholars had believed that the two countries were trying to regain regional hegemony and challenge the United States' strategic interests in Eurasia and East Asia.15Robert Kagan, “Вacking into World War III,” Fоrеign Pоl(xiāng)iсу, February 6, 2017, https://foreignpolicy.com/2017/02/06/backing-into-world-war-iii-russia-china-trump-obama.This realist economic security argument, which is pervasive in academic and political circles, embodies the national sense of superiority in American security thinking.16Helen E. S. Nesadurai, “Introduction: Economic Security, Globalization and Governance,” Тhе Pасifiс Rеviеw, Vol.17, Issue 4, 2004, p.463.It presupposes normal trade relations as hostile acts aimed at weakening US economic hegemony. Although the strategy still advocates “freedom”, “fairness” and “reciprocity” as basic principles of the international trade system, the core content of these principles has changed. The strategy proposed a re-examination of the economic competitiveness of the US versus the rest of the world, and a restructuring of the economic relations and balance of interests between the US and other countries, to preserve the existing competitive superiority of the US and maximize the advantages of its own enterprises. All this demonstrates Trump's pursuit of a world economic order that continues to be based on US leadership and puts US national interests first. Although the strategy still advocates cooperation with other countries, the focus is on allies based on shared values rather than traditional allies.17“Вrookings Eхperts on Trump's National Security Strategy,” Вrookings Institution, December 21,2017, https://www.brookings.edu/research/brookings-eхperts-on-trumps-national-security-strategy.At the same time, the strategy completely turned a blind eye to such keywords as multilateralism, WTO and global governance in the existing international cooperation.18“Вrookings Eхperts on Trump's National Security Strategy.”Judging from the Trump administration's adoption of the concept of economic security and its recent policies, the US economic policy has begun to turn inward and conservative. However, this does not mean that the United States is voluntarily relinquishing its global leadership. Instead,by taking advantage of its global political and economic influence, the US is attempting to pressure other countries through its domestic policies and change the existing balance of bilateral interests with other countries and the global economic order at the micro level, so as to consolidate its status as the global economic hegemon.

Crucial Reasons for Trump's Emphasis on Economic Security

The Trump administration's economic security strategy is a product of the United States' rising domestic contradictions and the relative decline in its international economic competitiveness, reflecting Trump's approach to addressing domestic and international economic challenges.

Alleviating domestic contradictions caused by widening gap of wealth

The 2008 financial crisis, which originated in the United States, not only dealt a blow to its economic strength, but also accentuated its longstanding structural contradictions. In the wake of the crisis, the country has witnessed slow growth of workers' wages, soaring trade deficits, and losing public confidence in the economy. These became the fundamental starting point for the Trump administration to revitalize US economy.19he White House, Nаtiоnаl Sесuritу Strаtеgу оf thе Unitеd Stаtеs оf Аmеriса, p.17.In response to the financial crisis, central banks of developed countries,represented by the US Federal Reserve, adopted quantitative easing in the hope of getting out of the crisis and promoting economic recovery as fast as possible through monetary stimulus. However, the US government failed to promote substantive economic structural reforms or set new development directions, thus unable to tackle the causes of wealth gap inherent in the economic structure. While the inflow of large amounts of money into the financial market and the rising price of assets such as stocks and bonds has enriched the middle- and upper-income groups who hold such financial assets, the low-income class in the US, with limited funds and lacking in capability for wealth diversification, have mostly held on to deposits. The low Federal Reserve interest rates kept long after the financial crisis have deprived low-income families of another important opportunity of wealth appreciation.20William D. Cohan, “How Quantitative Easing Contributed to Nation's Inequality Problem,” Тhе Nеw Yоrk Тimеs, October 22, 2014, https://dealbook.nytimes.com/2014/10/22/how-quantitative-easingcontributed-to-the-nations-inequality-problem.As a result, the gap between the rich and the poor in the US has been further widening, and inter-class rupture has grown as the lowincome become dissatisfied with the expanding disparities. The endogenous contradictions in US economy and the resultant widening wealth gap have fundamentally threatened economic stability, and undermined the benign competitive environment necessary for sustainable social development, thus weakening the basis of economic security. In order to appease the dissatisfaction of middle- and lower-income classes, the Trump administration has targeted free trade and economic globalization, actively adopting trade protectionist measures and highlighting the priority of US interests. While pursuing national interests, the Trump administration seeks to achieve a new balance in the international economic order that is favorable to the United States.

Restoring absolute US advantage in international competition

The rapid rise of emerging economies, represented by China, has posed a challenge to US dominance in the world economy. Overtaking Japan in 2010 to be the world's second largest economy, China's GDP reached $12.24 trillion in 2017, accounting for 15.17 percent of the world's total and contributing one-third of the world's economic growth,up from only $1.21 trillion in 2000 which accounted for 3.6 percent of global total.21See China's GDP data of each year at https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=CN.In comparison, the United States' GDP in 2000 accounted for 30.64 percent of the world's total, and the percentage fell to 24.55 in 2016.22Calculated according to the 2017 world GDP data issued by the World Вank, http://databank.worldbank.org/data/download/GDP.pdf.More importantly, China's rapid rise in science and technology has caused widespread concern in the US. The Trump administration has also narrow-mindedly regarded the fast development of China's scientific and technological strength as a threat to US economic security, fearing that the US economic hegemony would thus be eroded. According to a report by the Asian Development Bank, China broke Japan's monopoly in Asian hightech exports in 2014, accounting for 44 percent of Asian countries' total high-tech exports, up from 9.4 percent in 2000.23“China's High-Tech Eхports Surpass Japan in Asia,” Xinhuа, December 11, 2015, http://www.хinhuanet.com/world/2015-12/11/c_128520598.htm.At the same time, rising rapidly in emerging fields such as renewable energy and electric vehicles,China is becoming an important driving force for the world's sustainable development. Take artificial intelligence (AI) as an example. Since 2014,Chinese enterprises, represented by BAT (Baidu, Alibaba and Tencent),have held equity in 39 start-up AI companies worldwide, accounting for 46 percent of the total number of such companies in the world, while the figure for the United States is 44 percent.24“Rise of China's Вig Tech in AI: What Вaidu, Alibaba and Tencent Are Working on,” April 26, 2018,https://www.cbinsights.com/research/china-baidu-alibaba-tencent-artificial-intelligence-dominance.Meanwhile, with the advent of a digital economy era, China's advantage in population scale will be reflected in the rich big data and the economic momentum it brings. Although China still has a long way to go in the field of technological innovation, its strong momentum has worried the US government and high-tech companies who seek to maintain their absolute competitive advantage and dominance by curbing the pace of China's technological development.

Impacts on International Economic Cooperation

The Trump administration's economic security strategy raises the stable development of US economic strength to the level of national security,emphasizing that the United States should maximize its interests and maintain its hegemonic position in the global economic order by dominating international economic and trade rules and developing the economic strength centered on technological innovation and energy industry. However, the realization of economic interests based on the perception of absolute security has fundamentally undermined interstate economic cooperation characterized by mutual benefits and win-win outcomes, and broken the existing international balance of interests. The United States has always prided itself as the founder and protector of the post-war liberal order, but economic liberalism, featuring free trade and open market, is an inherent component of the liberal norms and values as promoted by the order.25Hal Вrands, Аmеriсаn Grаnd Strаtеgу аnd thе Libеrаl Ordеr: Соntinuitу, Сhаngе, аnd Oрtiоns fоr thе Futurе, RAND, 2016, p.2.Despite the banner of safeguarding liberalism,Trump's National Security Strategy denied the competitive order in the liberalist market, which would bring greater uncertainty and risks to international economic cooperation.

Global economic order to be biased toward conservative realism

Regarding normal trade relations as a threat to economic security,Trump has been exploiting the inherent sensitivity of national security issues and the insufficient regulation in this respect in the existing international trade rules to interpret economic security in an excessively broad manner. He intervenes in normal import and export of goods,the development of specific industries as well as investment, mergers and acquisitions between enterprises in the name of national security,completely deviating from the original free-market logic and international trade rules. Given the economic volume and global influence of the United States, once Washington's economic policy begins to shift toward a zerosum logic, other countries will follow the US and also opt for unilateralism.The global economic order will thus turn to conservative realism,characterized by the dominance of unilateral policies and the maximization of a country's economic interests. The Trump administration's unilateral increase of tariffs based on domestic law is reviving the country's trade protectionism of the 1930s.26Josh Wingrove, “Economists Invoke Great Depression in Warning to Trump on Trade,” Вlооmbеrg,May 2, 2018, https://www.bloomberg.com/news/articles/2018-05-02/economists-invoke-great-depressionin-warning-to-trump-on-trade.Today, with a high degree of international economic integration and the extensive development of the value chain,the United States' unilateral tariff hikes will not only lead to trade diversion and the severing of the existing value chain, but will also bring major negative impacts on global economic growth.27Chris Giles, “IMF Chief Warns Trade War Could Rip Apart Global Economy,” Finаnсiаl Тimеs, April 11, 2018, https://www.ft.com/content/c8c4bb22-3ccd-11e8-b9f9-de94fa33a81e.Therefore, the US unilateralism not only challenges the multilateral cooperation system established after World War II, but also upsets the balance of the existing regional and global economy, which will produce more uncertainty to the weakly recovering international economy.

That being said, it should also be noted that despite its predilection for unilateralism, the Trump administration will continue to exert pressure through multilateral channels to promote its own goals when multilateralism is consistent with US national interests. As is emphasized in the strategy,the US will actively seek cooperation with potential like-minded allies,28The White House, Nаtiоnаl Sесuritу Strаtеgу оf thе Unitеd Stаtеs оf Аmеriса, p.38.even though they are not necessarily allies in the traditional security sense.Generally, Trump's attitude toward multilateralism should be depicted more as pragmatic, which does not oppose unilateralism, but rather gives priority to US unilateral interests and takes advantage of multilateral cooperation when it can promote unilateral goals.

International trade and investment environment to deteriorate

In the name of protecting national security, the Trump administration has been constantly intervening in normal trade and investment activities between economic entities, disrupting the existing order of international economic and trade cooperation, and undermining the existing interstate cooperation framework and balance of interests. To a certain extent,the United States is breaking, in a destructive way, the current multilateral trade structure represented by the World Trade Organization, trying to redefine its national interests and rebuild an international economic and trade order that serves its interests. Trump's economic security strategy not only challenges at the macro level the multilateral economic system that has long been dominated by the US, but also fundamentally “breaks down the wall between economics and national security,” as it explicitly promised that the US administration will, by bilateral bullying instead of enforcing and obeying the laws and rules, advance what it calls “principled realism”and “integrate all elements of US national power—political, economic, and military.”29Adam Posen, “The Post-American World Economy: Globalization in Trump Era,” Fоrеign Аffаirs,March/April 2018, p.31.

This abuse of the concept of “national security” will have a huge negative impact on the international trade and investment environment.In March 2018, Trump announced that he would impose tariffs of up to 25 percent on imported steel and 10 percent on aluminum, on national security grounds. This act targeted not only China, but also traditional American allies such as the European Union and Japan. As Chad Bown, a trade expert at the Peterson Institute for International Economics, wrote, this would lead trade partners to “use similar exceptions to halt US exports of completely different products to their markets” and bring about an endless reverse of global trade relations.30Jacob M. Schlesinger, “Trade War Risks from ‘National Security' Tariffs — The Outlook,” Fоx Вusinеss, June 18, 2017, http://www.foхbusiness.com/features/2017/06/18/trade-war-risks-from-nationalsecurity-tariffs-outlook.html.Under this circumstance, the adjustment of the US international economic policy may lead to a fundamental change in international relations in general.31Hal Brands, Аmеriсаn Grаnd Strаtеgу аnd thе Libеrаl Ordеr: Соntinuitу, Сhаngе, аnd Oрtiоns fоr thе Futurе, p.24.The international economic order would begin to turn inward and trade frictions continue to rise, and the conflicts would bring greater challenges to the already difficult coordination of international economic policies. The model of promoting peace among countries through effective trade policy coordination, which has proved effective after World War II, is now being reversed. The current US economic strategy centered on protecting its own security will cause more frictions in inter-state economic policies.

Negotiation on international trade rules to be more difficult

Since the end of World War II, the United States has led the establishment of a liberal international economic order based on trade and finance, setting up multilateral institutions and a system of supporting rules. However, the Trump administration is currently not concerned about the basic rules and aspects of global economic operation, but is instead obsessed with the so-called “unfairness” that the US encounters in the existing system. As indicated in the National Security Strategy, Trump pays more attention to trade deficits, technological innovation capabilities, and energy leadership. The protection of trade, intellectual property and capital as well as the control of energy resources will be major priorities of his new policy framework. Although specific protectionist measures and US interests are yet to be defined, the Trump administration has already begun to address the problems that may come with the formulation of new rules through bilateral negotiation. Utilizing its negotiating advantages, the US will focus on negotiation and formulation of rules related to main issues covered by the strategy, in an aim to further break through the limitations of current international rules and fill in conceptual vacuums that are not fully defined.

The shift in the Trump administration's foreign policy concept has brought even more severe challenges to the international consultations on trade rules already in trouble. The US is pressuring other countries with its own strength, redefining the rules of concern at the bilateral level,and then legitimizing them in regional and multilateral frameworks to rationalize its “America First” concept and trade protectionism within the new international rules system. By so doing, the Trump administration is gradually adjusting the global economic order to protect US interests to the fullest extent. Therefore, adopting the concept of economic security in the National Security Strategy as a disguise for trade protectionism is likely to be only the first step in the United States' strategic adjustment.

Implications for China-US Economic and Trade Relations

The Trump administration regards China as a competitor and rival in the National Security Strategy, intending to use various trade protectionist measures to disrupt China's implementation of its scientific and technological strategies and hinder the rapid improvement of China's sci-tech strength in critical areas. With the continued growth of Chinese enterprises,bilateral economic and trade frictions between China and the US will be chronic.

China's exports to the US to encounter more tariff barriers

The General Agreement on Tariffs and Trade (GATT) and subsequent multilateral trade negotiations under the WTO framework significantly reduced tariffs in various countries. The average tariff level of the United States in 2016 was 2.87 percent, which was at a lower level among developed countries. Tariff adjustment is increasingly weakened as a traditional means of trade protection. However, since taking office,Trump has quickly launched tariff measures and increased the cost of imported products by raising tariffs to protect the competitiveness of relevant US industries. Among them, the initiation of anti-dumping and countervailing investigations on related products and the taxation of goods based on alleged dumping and subsidizing practices are among Trump's tactics for raising tariffs. Most of these anti-dumping and countervailing measures are directed at China. In 2017 alone,Trump issued eight anti-dumping taxation orders against China, which accounted for nearly 30 percent of such new orders in the year and reached the highest level in recent years. In the same period, six new countervailing taxation orders against China were issued, accounting for two thirds of total new orders of this kind.32US International Trade Commission, “Antidumping and Countervailing Duty Investigations,” March 12, 2018, https://www.usitc.gov/trade_remedy/731_ad_701_cvd/investigations.htm.At present, these antidumping and countervailing duties are concentrated on productive raw materials. However, with the establishment of the US foreign economic policy framework and the revelation of a clear goal to curb China's innovative capability, the US has begun to target high-tech fields such as robots, new energy vehicles and biotechnology, which were written into the plan Made in China 2025. High tariffs are levied as a measure of trade remedy to raise the threshold for relevant Chinese products to enter the US market.33“How ‘Made in China 2025' Frames Trump's Trade Threats,” Вlооmbеrg, April 10, 2018, https://www.bloomberg.com/news/articles/2018-04-10/how-made-in-china-2025-frames-trump-s-trade-threatsquicktake.

Roberto Azevêdo, Director-General of the World Trade Organization (WTO), indicated at a press conference in Geneva on July 25 that the increase of trade restrictive measures would be inconducive to world economic growth and job creation, and called on parties to support the WTO's role with an open mind.

Innovative capability of Chinese enterprises to face US restriction

Section 301 of the US Trade Act of 1974 authorizes the US President to take all appropriate measures, including retaliation, to ensure that another country's actions, policies, and laws are remedied, when that country violates the international trade agreements through its actions, policies and laws or unreasonably, improperly and discriminately restricts US business activities.

Trump relaunched the Section 301 investigation after taking power to target China's policies, laws and practices related to intellectual property protection, innovation and technology transfer. In March 2018, the Office of the US Trade Representative (USTR) issued a report on the investigation against China, which focused on the following aspects: whether US companies investing in China face pressure to transfer their technologies, and whether compulsory technology transfers exist; whether the US companies are deprived of market-based licensing capabilities and lose control of their own technologies; whether Chinese-funded enterprises engaged in foreign investment receive high-end technologies and intellectual property rights through government support, thus facilitating large-scale technology transfers in important industries; and whether the Chinese enterprises have conducted government-supported intrusions into commercial networks and theft of intellectual property.34USTR, “Findings of the Investigation into China's Acts, Policies and Practices Related to Technology Transfer, Intellectual Property, and Innovation under Section 301 of the Trade Act of 1974,” March 22,2018, p.5.The report's conclusion that China engages in compulsory technology transfers and has weak intellectual property protection profoundly reflects the United States' strategic intention in its competition with China. On one hand, the US requires China to enhance intellectual property protection, thus strengthening the competitive advantage of US companies in high-tech fields and consolidating US monopoly on the world's advanced technologies. On the other hand, by intervening in China's domestic policies such as industrial guidance and technological support, hindering Chinese enterprises' upgrade of traditional technologies and development of high-end technologies, the US aims to cripple China's innovative capability and thus contain its scientific and technological strength. Fundamentally, the Trump administration intends to invoke domestic legal procedures like Section 301 and utilize the US power to win more advantages and opportunities for US hi-tech industries and realize US dominance.

China's investment in the US under stricter scrutiny

In the field of bilateral investment, cross-border mergers and acquisitions have become the main target of the US government's investment review. In September 2017, Trump issued an executive order prohibiting Chinese acquisition of Lattice Semiconductor. The US authorities believed that this merger entailed the risk of transferring intellectual property to overseas investors and posed a threat to US national security. In January 2018, after three rounds of review, the Committee on Foreign Investment in the United States (CFIUS) rejected the request of Ant Financial to acquire MoneyGram on the basis that the latter possesses the personal information of a large number of US citizens. The CFIUS has become a barrier for foreign companies to invest in the United States and actually impeded technology transfers. Regardless of the cost of previous consultations, the committee's veto will render them null and void. Moreover, the US Congress is discussing expanding the CFIUS's powers, so as to extend its purview from specific industries to sensitive business areas such as technology and materials through legislation.35“Вrookings Eхperts on Trump's National Security Strategy.”

China is currently the main target of CFIUS investment reviews.Official statistics show that from 2013 to 2015, 20 percent of US filings were against Chinese investors.36The Committee on Foreign Investment in the United States, “Annual Report to Congress (Report Period CY 2015),” p.16.The CFIUS's targeted reviews of Chinese companies have significantly contributed to the decrease in China's investment in the United States. In 2017, China's direct investment in the US totaled $29 billion, down by almost 37 percent from 2016's $46 billion.It is estimated that investment failures due to CFIUS reviews amounted to $8 billion.37Thilo Hanemann, Daniel Rosen and Cassie Gao, “Two-Way Street: 2018 Update: US-China Direct Investment Trends,” Rodium Group and National Committee on China-US Relations, April 2018, p.10,https://www.ncuscr.org/sites/default/files/page_attachments/Two-Way-Street-2018_Full-Report.pdf.As some observers said, “The CFIUS has become the No.1 weapon in the Trump administration's protectionist arsenal, the ultimate regulatory bazooka.”38“The Committee on Foreign Investment in the United States, Powerful and Unseen, Is a Gatekeeper on Major Deals,” Тhе Nеw Yоrk Тimеs, March 5, 2018, https://www.nytimes.com/2018/03/05/business/what-iscfius.html.

Conclusion

The Trump administration's economic security strategy has profoundly influenced the direction of the US international economic policy, shifting its focus from pursuing free access and openness to deep government intervention in economic activities. The Trump administration's severing of established value chains and interest connections with China, whom it regards as a major competitor, through trade protection and investment restrictions not only affects the economic prosperity of China and the US,but is also unconducive to achieving any country's “economic security” or“national security.” In this sense, Trump's policy can be described as “shortsighted.” In the process of economic globalization over the past three decades, China and the United States have engaged in in-depth economic cooperation led by trade and investment, and promoted the convergence of bilateral interests. By leveraging their respective strengths, China and the US have cooperated in various fields including science and technology to achieve optimal resource allocation, which strengthens many American companies'competitiveness and maximizes their benefits. Although competition between the two countries exists in certain areas, China is still indispensable to the United States' long-term economic development. China's relaxation of market access and its transformation to a domestic demand-oriented growth model will provide US companies with more opportunities to participate in and benefit from China's economic development. At the same time,since China and the US are two largest economies with a combined GDP that accounts for 40 percent of the world's total, a reasonable resolution of bilateral trade frictions and the stable development of economic relations would not only be conducive to the two sides' sustainable prosperity, but would also provide critical momentum for global economic growth. History has manifested repeatedly that cooperation leads to long-term coexistence while conflicts make both sides fail and suffer. Therefore, China and the US,with the greatest mutual understanding and the highest rationality, should together strive for a new model of full cooperation and joint development in the 21st century.