Opening up govt procurement, infrastructure cooperation can ease US trade gap with China

By Hu Weijia Source:Global Times Published: 2018/12/5 23:16:23

Opening up government procurement, infrastructure cooperation can ease US trade gap

Some observers believe the current surge in the US federal budget deficit is a reason why US President Donald Trump said the country's military spending of $716 billion is too high. If Trump wants to improve the financial situation of the federal government and individual states, there may be a better choice than military spending cuts, and that is to cooperate with China over his infrastructure plan.

Trump's broad infrastructure financing and policy blueprint will boost spending, throwing financial burdens on state and local governments in the US. The public-private partnership model is a good way to ease the fiscal difficulties of US authorities, as it allows governments and private enterprises to work together to finance infrastructure projects.

Chinese companies are suitable partners, due to their low-cost advantage. China has a strong capacity for infrastructure. For instance, the country has built the world's largest high-speed rail network, enabling Chinese companies to accumulate valuable experience in the infrastructure sector.

However, making China-US infrastructure cooperation a reality will not be an easy thing.

One of the obstacles for Chinese companies to take part in Trump's infrastructure plan is the strict procedures that cover US government procurement. It's highly likely that Chinese companies won't be included in the directory of certified enterprises in Trump's infrastructure plan.

Washington's attitude toward the Belt and Road initiative (BRI) is another obstacle, preventing the US from cooperating with foreign financial institutions along BRI routes.

China and the US are undergoing a testing time as they seek to resolve their trade dispute, after leaders of the two countries reached an agreement over the weekend on a trade truce. But finding a breakthrough in cooperation is more important than a trade truce. Massive infrastructure projects offer opportunities to set an example of win-win cooperation between China and the US, at a time when the two countries are reshaping their relationship.

If China and the US can consider expediting negotiations for a reciprocal opening-up of their government procurement markets, it will help restart the long-suspended negotiations over a bilateral investment treaty.

Efforts to promote investment facilitation will likely cause an import surge in China, addressing the trade imbalance between the two countries.

The author is a reporter with the Global Times.
Newspaper headline: Opening up government procurement, infrastructure cooperation can ease US trade gap


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