Chinese officials forecast China-US trade war not close to an end

By Chen Qingqing Source:Global Times Published: 2018/11/18 20:23:39

Best outcome of China-US summit at G20: trade talks to resume

Lou Jiwei (right), former minister of finance, speaks at a forum in Beijing held by financial magazine Caixin on Sunday. Photo: VCG

Some Chinese and US economists and officials are taking a cautious view of the upcoming meeting between Chinese and US leaders at the G20 summit, which will be held in Argentina from November 30 to December 1. The impact of the bilateral trade war will become mostly apparent in 2020, and the best outcome of the meeting will be the resumption of trade negotiations, the economists said on Sunday.

The global economy is highly likely to experience significantly more turbulence, with growth slowing further in the next two years. Meanwhile,  the impact of trade friction will likely flare up in 2020, Zhu Min, former deputy managing director of the IMF, told the opening of a two-day forum in Beijing held by financial magazine Caixin.

"Considering an economic slowdown and more Fed interest rate hikes, trade wars will increase the intensity of economic uncertainty," Zhu said.

The divisions between China and the US have become a major stress in the global trade system, Charlene Barshefsky, former US trade representative, told the audience. "A country using national security as an excuse to do whatever it wants erodes the global trade system," she said, adding that the WTO system has not kept up with the times and led to a focus on some obsolete issues.

China and the US have been entangled in a trade war since the beginning of this year, and they have moved to impose billions of dollars in tariffs on each other, which sets a negative example for other economies, she noted. This zero-sum thinking, in addition to regimes marked by geopolitical faultlines have hurt the global system, which has to be changed.

Chinese officials also called for effective bilateral talks that could lead to resolve of trade disputes.

"China-US divisions are structural problems, which may not be solved in the short term," said Lou Jiwei, former minister of finance. "However, a break-up will cause huge damage to both, as China is not the former Soviet Union, and it has become highly integrated into the current global system," he added.

While hoping for progress in China-US relations, some officials remain cautious.

The best outcome of the meeting between Chinese and US leaders at the upcoming G20 summit would be a resumption of serious negotiations rather a situation where each accuses the other of accomplishing nothing and walking away, Barshefsky added.

Long Yongtu, former Chinese chief representative for trade negotiations, called for the two sides to focus only on trade issues and not go beyond that. "I always hold a cautious and optimistic view on trade talks, and it has to be fully recognized that trade wars will hurt the US much more, eventually," he said at the forum.

"Also, we should put aside political issues while engaging in trade talks. Otherwise, we'll never reach any agreement."

In recent decades, the WTO system has been jeopardized as more of its members focus more on regional and bilateral trade negotiations, which has also caused the system to become more chaotic, Long said.

"Still, China has to firmly support the WTO, which needs to deepen reform, and participate actively in regional trade negotiations, " he said.

China holds an open attitude toward the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), a major regional free trade platform, and hopes that when it becomes effective, it will be conducive to East Asian cooperation and inclusive development, Chinese Premier Li Keqiang said during the 13th East Asia Summit in Singapore on Thursday.

Long, who is also the former vice minister of commerce, suggested that China should consider seriously participating in the CPTPP as well as the Regional Comprehensive Economic Partnership (RCEP) amid a slowing economy and rising protectionism.

Newspaper headline: Best outcome of China-US summit at G20: trade talks to resume


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