China seeks to avoid fate of Japan in US trade war deal as heavyweight economists gather in Beijing

Mainland economists seek advice from Japanese scholars over trade war experiences after their economic stagnation of the 1990s

Beijing is worried that a currency deal with the United States could lead to its export engine losing steam

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Then US Treasury Secretary James Baker speaks to reporters at New York’s Plaza Hotel in September 1985 at the announcement of the Plaza Accord. Photo: AP

Published: 12:00pm, 20 Mar 2019Updated: 11:28pm, 20 Mar 2019

A group of heavyweight Chinese economists sat down with Japanese counterparts in Beijing on Tuesday to discuss whether China can avoid its own “lost decades”, as the government looks to negotiate a deal to end the US-China trade war.

Japan engaged in a lengthy trade dispute with the United States in the 1980s, with a series of deals over currency and market access blamed in some quarters for the decades of economic stagnation that followed.

It is known that many in Beijing are worried that a bad trade deal with the US could result in China following a similar trajectory, with currency exchange rate and market access high on the list of demands of Washington’s negotiators.

In particular, US demands that China limit the yuan’s depreciation have been compared with the Plaza Accord, under which Japan, France, Germany, the United Kingdom and the US agreed to push the value of the US dollar down against the Japanese yen and German Deutsche mark.

The US flag flies over shipping cranes and containers after a report said the United States and China are close to reaching a major trade deal that would see both sides lower some of the tariffs imposed during an often-bitter trade war. Photo: AFP

At a symposium on Tuesday, Hua Sheng, a Chinese economist and honorary dean of the economics school at Southeast University in Nanjing, said he was eager to hear from Japanese experts over how the Plaza Accord had changed the Japanese economy.

“It’s a big warning for the Chinese people,” Hua said. “Japan is China’s neighbour, and Japan’s path has significant referential value for us.”