Ice-breaking signs show up for China-US trade dispute

By Xie Jun Source:Global Times Published: 2018/11/13 22:03:41

Experts say China is only market for US in terms of growing speed

Chinese Vice Premier Liu He and US Treasury Secretary Steven Mnuchin. Photo: VCG

Multiple signals from a variety of sources in China and the US indicate the increasing willingness to engage in serious, high-level talks may be the key to ending deadlocked trade negotiations between the world's two largest economies.

Foreign Ministry spokesperson Hua Chunying reaffirmed Tuesday that Chinese President Xi Jinping and US President Donald Trump agreed during their phone call earlier that the economic teams of the two countries should strengthen contact with each other.

"Both of them agreed that China and the US should start negotiations on issues of common concern and proceed with the China-US trade issue to reach a scheme that both sides can accept," Hua said at Tuesday's routine press conference.

The Wall Street Journal reported on Monday that US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He had resumed discussions on a deal that could ease trade tensions. Liu and Mnuchin spoke by telephone on Friday, according to the report. Hua didn't confirm the two men had talked by phone.

More frequent communication between the two countries on the trade issue is viewed by some experts as a necessary prelude to the planned meeting between Xi and Trump later this month at the G20 summit in Argentina.

Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics (UIBE) in Beijing, said that political and economic conditions in the US do not support a long trade conflict with China.

"First, the results of the midterm elections in the US did not tilt toward Trump. Second, the US economy is widely seen as having reached its peak as shown by recent corrections in US stock markets. Those signs show that the tide is turning against Trump and his ability to continue the trade dispute with China," Tu told the Global Times on Tuesday.

Shi Yinhong, director of Renmin University of China's Center for American Studies, said that Trump has a batch of conditions that he requires the Chinese government to satisfy. These include scrapping government support measures for State-owned companies and ending the practice of sometimes requiring US companies in China to transfer technologies to Chinese partners. 

"I don't think the Chinese government can accept all those conditions unless the Trump administration also makes some concessions," Shi told the Global Times on Tuesday.

"I think the best result would be for the two countries to stop increasing import tariffs. But the US' ban on Chinese companies importing certain technologies is unlikely to change," Shi noted.

Cling to Chinese market

The signs of an ice-breaking path forward come as continued robust growth of China-US trade registered a very slight slowdown since the trade troubles began in July. Statistics show China-US trade in the first 10 months rose by 12 percent on a yearly basis, compared with a 12.1 percent growth in the first nine months this year.

US companies have also expressed willingness to cling to the Chinese market even under such external pressure. A recent survey conducted by HSBC showed that nearly half of the businesses that sell to China see the country as a top-3 destination to expand their business in the next three to five years, and this sentiment was strongest among US companies that were surveyed.

Forty percent of those US companies believe that China will be their most important market, according to findings of HSBC. The bank surveyed 1,205 companies from 11 global economies.

Sherman Ge, president of the US-based boat maker Metal Shark Asia Pacific Region, told the Global Times during the China International Import Expo last week that he was concerned about the trade dispute but now believes that companies should "take a long view" of the market.

Tu of the UIBE also told the Global Times on Tuesday that the Chinese market is very important to US companies as it is almost the only market with a rapid growth for them.

"Of course for US companies that only view China as a manufacturing base and then export made-in-China products back to the US, they might be intimidated by the trade dispute," he noted.

"But for companies that also target Chinese customers, I don't think they will give up the Chinese market just because of external policy changes," said Tu.

Newspaper headline: Talks key to trade deadlock


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