Weak point in China economic system offers Beijing incentive for commerce deal
- Author: Wendy Palmer Jan 11, 2019,
Jan 11, 2019, 0:57
Three days of U.S.
The U.S. China Business Council, a group representing American companies doing business in China, applauded the "substantive discussions" over the past three days, but urged the two governments to make tangible progress on achieving equal treatment of foreign companies in China and changes to policies aimed at technology transfer. At the heart of USA concerns is the "Made in China 2025" industrial policy, a strategy Beijing hopes will allow it to supersede USA technology supremacy, which it has since played down without indicating it will fully abandon the plan.
Since the Trump-Xi meeting in Argentina, China resumed purchases of USA soybeans.
Chinese Ministry of Commerce spokesman Gao Feng gestures as journalists raise hands for questions during a press conference at the Ministry of Commerce in Beijing, April 6, 2018. No timing was given and it wasn't immediately clear if the USA delegation would release a statement. He added: "It's been a good one for us". Vice Premier Liu He made an appearance at the talks on Monday in a sign the Chinese were also pushing for a positive outcome. Trump tweeted on Tuesday, the latest in a series of upbeat messages from him on the negotiations since both his meeting with Xi and the December market turmoil.
China made that pledge after the Xi-Trump meeting in Buenos Aires, when USA officials said China would start buying immediately.
On Wednesday, a clutch of Fed officials said they would be cautious about any further increases in interest rates so the central bank could assess growing risks to an otherwise-solid US economic outlook.
How China will enforce those measures will be key to any deal.
Those purchases would help meet another key demand from Trump: that China take action to reduce the massive USA trade deficit with its biggest economic rival.
Members of the US delegation told reporters the talks progressed well. Unfortunately, China's definition of what "should not and can not" be reformed has always included precisely the areas of most USA concern.
"China is determined to bring the trade war to an end", The Economist has reported. Apple Inc. cut its revenue outlook last week as sales of the iPhone were slower than expected in China, while data on factory activity and retail sales in the Asian nation were also weak. As producers say they won't let oil stockpiles exceed normal levels, fears of a slowdown in demand is abating as trade tensions ease between the world's top-two economies. Kohl's and L Brands also posted disappointing results and a wide variety of retailers plunged as investors anxious that the stock market's December plunge stopped some shoppers from spending as much as they had planned.
But much work remains before the two economic powers climb down.
However, a USTR statement emphasized American insistence on "structural changes" in Chinese technology policy, market access, protection of foreign patents and copyrights and cyber theft of trade secrets.
The truce came after the two sides imposed import duties on more than $300 billion of each other's goods.
Analysts said the positive momentum from the working talks will need to be followed up by more senior officials, such as Liu and USA trade representative Robert Lighthizer, who is in charge of overall negotiations on the United States side.
USA officials have long complained that China has failed to live up to trade promises, often citing Beijing's pledges to resume imports of American beef that took more than a decade to implement.
The US delegation, led by Deputy Trade Representative Jeffrey Gerrish, included representatives from the departments of energy, agriculture, treasury and commerce.