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Sino-US relations

Future of Sino-US trade ‘still in doubt’

Analysts say Beijing is ready to deal at talks, but may not be able to satisfy hawks in the US

PUBLISHED : Monday, 17 July, 2017, 11:30pm
UPDATED : Monday, 17 July, 2017, 11:30pm

China might propose further trade deals with the United States to warm up relations as the two countries wrap up their 100-day plan to address their trade imbalance, but the future of their economic ties is still uncertain, analysts said.

Any such deals will be unveiled while a Chinese delegation led by Vice-Premier Wang Yang, Vice-Finance Minister Zhu Guangyao and Vice-Commerce Minister Yu Jianhua is in Washington for the first Sino-US comprehensive economic dialogue, starting on Wednesday.

The talks are the culmination of an agreement made in April, when President Xi Jinping and his US counterpart Donald Trump met in Florida.

Several deals have been announced in the run-up to the talks, including ones involving soybeans and beef. But observers said it remained unclear if these pledges were sufficient to narrow the US$340 billion trade gap and satisfy the Trump administration, which has been politicising Sino-US economic issues.

The latest worries over bilateral tensions have been fuelled by Trump’s appointment of Dennis Shea, a China hawk, as deputy trade representative, and his growing dissatisfaction with Beijing over North Korea, they said.

He Weiwen, a former business adviser at the Chinese consulate in New York, said the deals announced were more of “an attitude or ways of exploration than actual problem shooting”.

The US might target Chinese steel after the talks, even though it only accounted for one per cent of US purchases, He said.

“The imbalance is unlikely to be reversed at all, given the division of labour in the global industrial chain, which the Trump administration can hardly solve through bilateral negotiations. But the two countries do need to enhance cooperation and manage their differences through further talks,” He said.

Trump vowed to take tough action against China during his election campaign, including labelling China a currency manipulator. But he toned down his rhetoric after meeting Xi in April.

China keeps the deals coming to sustain Trump’s focus on trade talks

“The 100-day plan was a China initiative to eliminate Trump’s negative sentiments over China, and it proved to be a success,” said Tu Xinquan, director of the China Institute of WTO Studies at the University of International Business and Economics in Beijing.

“China will try to boost imports from the US ... to show its commitment to not pursuing a trade surplus,” said Tu, who expects an eventual narrowing of the Sino-US trade imbalance.

In a trade report released at the end of May, the Ministry of Commerce outlined several areas for potential Sino-US cooperation, including aircraft, energy, movies, travel and e-commerce. It also called for the US to lift its ban on selling high-tech products, in place since the 1990s.

Beijing would use trade concessions to stabilise its ties with Washington, but that did not mean a total acceptance of US demands at the negotiating table, Tu said.

“It will be a dynamic process of gaming,” he added.