China seeks to separate trade from diplomatic row with US: experts

By Wang Cong Source:Global Times Published: 2020/5/14 18:13:40

Chinese Vice Premier Liu He speaks during the China-US phase one trade deal signing ceremony held in the White House in January. Photo: Xinhua

China is seeking to compartmentalize rising tensions with the US over a wide range of issues from trade to the COVID-19 pandemic by separating the phase one trade agreement from escalating diplomatic row, as it paved the way for increasing purchase of US agricultural products on Thursday.

While the move is largely in line with China's long-standing stance on trade agreements and other commercial cooperation, pushing forward the phase one trade deal despite souring bilateral ties carries fresh significance, as some in the US are actively seeking to undermine the hard-fought deal and the bilateral trade and economic relationship - the stabilizer in China-US relations, Chinese experts said.

In what appears to be a positive gesture, China on Thursday cleared regulatory hurdles to allow imports of US agricultural products - barley and blueberries, according to a statement from the Chinese General Administration of Customs (GAC). 

The move came just two days after Chinese officials reaffirmed the phase one deal was beneficial for not just China and the US but the entire world, and the two sides should work together to implement the agreement. 

While the GAC did not mention the phase one trade deal in the announcement, agricultural products make up a considerable part of China's pledge to increase purchases of various US products in the deal, which went into effect in mid-February. Allowing imports of more US farm products will help boost China's total purchases, trade analysts noted.

"This is an adjustment made against the backdrop of the COVID-19 pandemic, and it is in line with the consensus reached by both sides to create an enabling atmosphere and conditions for the implementation of the phase one agreement," Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing who advises the government on trade, told the Global Times on Thursday.

The latest move from China followed the release on Tuesday of a list of 79 items that will be exempted from tariffs imposed in response to the US' punitive tariffs during the trade war - all in line with China's commitment to carry out the phase one trade agreement, analysts said.  

However, as the China-US bilateral relationship has been on a downward spiral following Washington's constant attacks on China over the COVID-19 pandemic, with some US officials seeking to undermine the phase one trade deal, Beijing's latest moves appear to send a clear signal that it would separate the deal from the escalating disputes in other areas, experts said.

"[China] still hopes that economic and trade issues will not be politicized because that is not good for either side," Li Yong, deputy chairman of the Expert Committee of the China Association of International Trade, told the Global Times on Thursday, noting that separating the deal from politics could help the two sides address many challenges ahead.

"Going forward, there will be new challenges due to the COVID-19 pandemic. The hope is that both sides will resolve the challenges through communication rather than finger-pointing," said Li, who is also an advisor on trade policy.

Even as China maintained that it would move forward with the phase one trade deal, US officials, including President Trump, repeatedly brought the deal into their attacks against China over the pandemic. Trump even threatened to terminate the deal before changing his stance following harsh criticism from China. On Wednesday, Trump again took aim at the phase one trade deal, saying "100 trade deals" won't make up for the COVID-19 pandemic.

But despite US officials' attempt to politicize the trade pact and push for a decoupling from China, many in China believe that the massive and complex economic and trade ties between the two countries remain the bedrock for bilateral relationship.

While China is mounting a more forceful, full-fledged defense against the US attacks, holding to the phase one trade deal could help stabilize the trade relationship and in turn the overall bilateral relationship, analysts said.

"Economic and trade ties are the bedrock of the China-US relationship… some with ulterior motives are trying to undermine the bilateral relationship, and their actions don't even warrant a response," Gao said.   

Newspaper headline: More American farm imports on way

Posted in: ECONOMY

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