The conflict is a result of the growing US “jealousy” of China’s development, he said in a recent interview with Xinhua.
“China has become one of the most important countries of the world, and this wasn’t the case 30-40 years ago,” he said. “I am sorry to see that the United States fears the competition.”
The US administration uses the issue of trade deficit as a pretext as the majority of the American deficit does not come from trade, but from overconsumption and the American overconsumption cannot be solved by higher tariffs on Chinese goods, said Medgyessy.
The United States in May raised additional tariffs on 200 billion US dollars’ worth of Chinese imports from 10 percent to 25 percent, and threatened to levy extra duties on more Chinese products.
Medgyessy said the US tariff measures would backfire on the United States, as the global economy is intertwined.
“To impose tariffs can reduce trade, and in return, less trade will lead to the reduction of production, and the decrease of production will result in less investment, which hinders technical development,” he said.
“The trade war will push up the prices. You start with putting tariffs at the beginning and you end up with decreasing living standards,” he said.
The disputes should be settled through negotiation, based on goodwill, mutual respect and predictability between the parties concerned, he added.
Medgyessy also expressed his surprise at the US measures against Chinese high-tech companies such as Huawei. “This is not free trade and these measures are against WTO rules,” he said.
“The American presidency is intervening against Huawei. This is not free trade. Free trade has to leave space for competition. And may the best one win!” he said. “However, climate change, with all its social and economic consequences, is a much bigger threat to the security of the world and America.”
Medgyessy, who has been to China many times, is optimistic about China’s ability to handle the conflict, thanks to its very strong internal market, which it started to develop well before the emergence of the disputes.
The former prime minister also highlighted the relations between China and Hungary, which he said have maintained healthy and stable development ever since their diplomatic ties were established 70 years ago.
“The level of cooperation and harmony between Hungary and China could be set as an example for the whole world,” Medgyessy said.
He underlined the importance of Chinese investments in Hungary. “Chinese investments are very important to Hungary. Chinese people are very welcome, but not only business people, also tourists,” he said.
