Will the US-China trade war improve access for American firms seeking to tap 1.4 billion people?
- Washington feels Beijing has been discriminating against US businesses, limiting investment and trade flows while also imposing restrictive non-tariff barriers
- Bank card service providers Mastercard and Visa have been seeking to start yuan payment services since a WTO ruling in 2012, but are still waiting for approval
US President Donald Trump has delayed the application of additional tariffs on Chinese imports citing “substantial progress” in addressing the US demands for structural reform in the Chinese economy. This is the second article in a five-part series looking into these demands, which are the conditions for ending the trade war.
1. The US demand: market access
The Office of US Trade Representative (USTR) said in its Section 301 investigation report, which provided the legal grounds for Washington to start the trade war, that China has been discriminating against US businesses, limiting investment and trade flows.
The US business community also complained about numerous non-tariff barriers, from bureaucratic licensing procedures to selective law enforcement, as obstacles that hold back the growth of their businesses in China.
For Beijing, however, China has already done enough to give US businesses access as it has been rolling out the red carpet for foreign investors, offering tax breaks and cheap land.
In a white paper reviewing its own performance after its entry into the World Trade Organisation (WTO) in 2001, China said it had comprehensively delivered what it had promised, including opening up the domestic market to foreign competition.