US may lower China's purchase quota slightly amid coronavirus: economist

Source:Global Times Published: 2020/2/12 12:59:59

Photo taken on May 16, 2018 shows an automatic container dock in Qingdao, east China's Shandong Province. (Xinhua file photo)


 

The US may, informally, slightly slow China's purchase quota amid the outbreak of novel coronavirus pneumonia (NCP), if China expands its US imports on a large-scale, said Wang Tao, chief China economist of UBS.

As NCP has spread across the country and could deal a major blow to China's economy, it will be difficult for China to raise its purchases of US products as agreed in the phase one trade deal, Wang said in a note sent to the Global Times on Wednesday.

The US should show its understanding toward China's difficult situation before China makes any move, said Wei Jianguo, a former Chinese vice commerce minister.

"China values the trade deal and is trying its best to act in line with the agreement," he told the Global Times.

According to the text of the deal, China has agreed to increase imports of US agricultural, manufacturing and energy products by $200 billion in the next two years, over the $186 billion it spent in 2017.

China's imports from the US may be slowed in the short term, but the pace will be accelerated after the end of the epidemic, Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, told the Global Times on Wednesday.

As to whether or not the "force majeure" clause will be invoked depends upon talks between the two sides, he said.

In addition, the People's Bank of China, the country's central bank, may cut the reserve requirement ratio by at least 100 basis points (bp) in 2020 to boost the economy, with 50 bp expected in February, Wang added.

Global Times

Posted in: ECONOMY

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