Xi-Trump meeting hints at optimism for trade talks

By Chen Qingqing Source:Global Times Published: 2019/6/19 23:35:30

Analysts remain cautious, claiming old era of bilateral relations is over

The upcoming meeting between China and the US leaders at the G20 summit sends a positive signal for stalled trade talks and injects new momentum into global markets, but analysts remain cautious about whether the two sides will reach a deal to end the trade war, as the old era of China-US relations is already over. 

Chinese President Xi Jinping had a phone conversation with US President Donald Trump on Tuesday, at the latter's request, and the two sides will meet during the upcoming G20 summit in Osaka, Japan, later this month. They will have further discussions on bilateral ties and issues of common concern, according to the Xinhua News Agency. 

It offered a positive signal for Asian markets on Wednesday, and major stock indexes rose on optimism that the world's two largest economies might break the ice on trade since negotiations fell apart a month ago. Both the Shanghai Composite Index and Shenzhen Component Index closed higher on Wednesday, reflecting rising expectations for an easing of the trade war. 

The two leaders will talk about fundamental issues concerning China-US relations, and Xi reiterated that the two sides should solve their problems through dialogue on an equal footing, with the key being to accommodate each other's legitimate concerns, Xinhua said. 

Trade talks between China and the US have been stalled since Chinese Vice Premier Liu He met his US counterparts for the 11th round of negotiations in May. There has been an escalation in the trade war after the US threatened more tariffs on Chinese goods and a unilateral clampdown on China's high-tech sector.

A reciprocal deal is in the interest not only of people in the two countries but the whole global community, Lu Kang, spokesperson for the Chinese Foreign Ministry, told a routine press briefing on Wednesday. 

"Divergences on trade issues can be solved through talks, as long as these talks are built on mutual respect and reciprocity. The most important thing is to find solutions that the two sides can accept," he said, noting that any practice deviating from that principle will lead nowhere.

Trump officially kicked off his re-election campaign for 2020 on Tuesday in Florida, where he turned to a familiar playbook by taking credit for the strong US economic performance, according to media reports. 

Although the US economy has looked resilient in the past year, Trump's trade policy and threats of tariffs have cast a shadow over the growth outlook, drawing complaints from businesses, trade groups and industry representatives. 

"Under these circumstances, Trump needs to come up with new measures to boost the US economy, including ways to help Wall Street. The G20 meeting is a good way to achieve this goal," Liang Haiming, dean of Hainan University's Belt and Road Research Institute, told the Global Times on Wednesday. 

Major conglomerates such as Walmart and Costco have warned that imposing more tariffs on Chinese goods will hamper business growth, which will eventually send out a chill to the US economy and impact Trump's pledge to "make America great again." 

The US president is likely to face headwinds in the coming months amid concerns over his tough stance on trade policy with China, Mexico and Europe, the Washington Post reported on Monday. 

While about 70 percent of the US economy is driven by consumer spending and consumer confidence remains strong, further escalation of the trade war by increasing tariffs would become more problematic and may lead the US into a recession next year, the report said. 

"At this point, the US is hoping for progress on a trade deal with China," Bai Ming, deputy director of the Ministry of Commerce's International Market Research Institute, told the Global Times late on Tuesday night. 

Uncertainty ahead 

Analysts have forecast that a bilateral trade deal is unlikely to be concluded at the G20 summit, but the Trump-Xi talks may help to unblock the stalled trade negotiations, which will help defuse the US-China trade and technology wars.

"However, China-US relations won't go back to the old days," Song Guoyou, director of Fudan University's Center for Economic Diplomacy, told the Global Times on Sunday.

Under the Trump administration, US foreign policy toward China has shifted toward a hardline approach in which China is viewed as a strategic competitor. 

Although Trump's political opponents such as Democratic presidential candidate Joe Biden reportedly have a more positive attitude toward China, it is still too early to say whether American politicians will change their stance on China, analysts predicted. 

Biden has argued that China should not be seen as a competitor for the US, which sparked criticism from rival Democratic candidate Bernie Sanders, CNN reported in May.

"No matter who wins the election, it will take a very long time for both sides to rebuild trust in the aftermath of the current trade war," Song said. 

Posted in: DIPLOMACY

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