Chinese optimistic on trade

By Wang Cong Source:Global Times Published: 2019/1/30 21:58:41

‘Good faith’ from both sides raises breakthrough hopes

Chinese and US trade officials are set to make another attempt at striking a trade deal to defuse an increasingly bruising trade war that has rattled global markets and presented mounting challenges to both economies. Photo: VCG

When Chinese and US trade negotiators meet at the White House on Wednesday US time, many in China will closely watch out for any news from the latest talks aimed at ending a trade standoff between the world's two largest economies.

The extremely high-stake talks are arguably the biggest news in China ahead of the Spring Festival - the Chinese Lunar New Year. In the days leading up to the talks, US officials sent mixed signals, with some suggesting major breakthroughs, while others seeing a continuing technology crackdown on China and Chinese firms.

Still, despite the dramatic turn of events in the past few days, many in China hope for at least some breakthrough. And their optimism stems mostly from the "good faith" displayed by both sides ahead of the negotiations, the highest level since the top leaders of the two countries reached a truce deal in December 2018.

Good faith

"The fact that [Chinese Vice Premier Liu He] is traveling to the US so close to the Chinese New Year means there is a huge possibility that the two sides will reach a deal," Shi Xinyu, who owns an import-export business in Yiwu, told the Global Times. The city of Yiwu in East China's Zhejiang Province is a globally known manufacturing base. 

Shi said many business owners in Yiwu, who have seen orders from the US declining, feel optimistic. "Many believe Liu wouldn't go if there was no chance for a deal."

Liu arrived in Washington on Monday afternoon local time, leading a huge delegation consisting of senior officials from more than 10 Chinese government agencies, including the commerce and finance ministries.

"This shows not only China's good faith in the talks, but also the country's willingness to take concrete action in various areas," Wei Jianguo, a former vice commerce minister, told the Global Times on Wednesday. 

There were also overtures from the US. On Monday, White House Press Secretary Sarah Sanders issued a statement saying that President Donald Trump welcomes the Chinese delegation. Later on the day, Sanders announced at a press briefing that Trump was planning to meet the Chinese vice premier on Thursday, when the trade talks are scheduled to end.

"These were unexpected moves… they show that Trump attaches great importance to the talks," Wei said. "I believe there will be a major breakthrough."

Behind the positive signs was eagerness from both sides to end the trade frictions, which have begun to weigh on economic growth and financial markets in both countries and around the world. Particularly in the US, Trump is eager to have a quick win after a setback in a battle over a border wall that saw part of the US government shut down for more than a month, according to a Washington-based business consultant focused on Chinese firms. 

"[Trump] is in urgent need for a win to turn the tables," the business consultant, who spoke on the condition of anonymity, told the Global Times on Wednesday. "He is rushing for a quick win in the trade war."


However, the optimism did not come without dark clouds. 

On the day the Chinese delegation arrived, the US Department of Justice unsealed two indictments against Huawei, accusing the Chinese telecoms firm of committing bank fraud and stealing intellectual property.

Those moves prompted a firm pushback in Beijing. On Tuesday, China's Foreign Ministry spokesperson Geng Shuang urged the US to stop its "unreasonable bashing" of Chinese firms.

Although the US maintains that the two issues are not related, such developments dampened expectations for the trade talks because they showed China is facing three competing forces within the US government, according to the business consultant in Washington. 

While Trump longs for a deal, some hawkish players inside the US delegation want to push for more concessions from China, while "hostile forces" try to disrupt the talks altogether, the consultant said.

However, "these distractions will not impact the process," Wei said, pointing out that while the US "technological crackdown" on China is a long-term strategy, both sides are ready to move forward on trade to "not only stop further tariffs but eventually get rid of the current tariffs." 

But even on trade, there are still deep divisions between the two sides, where US officials continued to call for "structural changes" to the Chinese economy, some of which, according to Chinese analysts, touch China's bottom line.

"China is open to and is actively pursuing some structural changes on its own, but the US should not seek to change China's development model. That's the bottom line," Liu Ying, a research fellow at Renmin University of China's Chongyang Institute for Financial Studies, told the Global Times.

Posted in: ECONOMY

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