Trade war: phase one deal raises hopes China will rekindle economic reforms 18 years after joining WTO

A phase one trade deal with the US could invite necessary external pressure for Beijing to speed up opening and liberalisation, analysts say

The deal announced last week has prompted comparison with goals China was required to meet in order to join the World Trade Organisation (WTO) in 2001

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China joined the World Trade Organisation (WTO) in December 2001. Photo: AP

Published: 1:01pm, 17 Dec 2019Updated: 10:53pm, 17 Dec 2019

The phase one trade deal between China and the United States has raised hopes that it will create fresh impetus for Beijing to speed up long-delayed market opening and economic liberalisation measures, analysts said, some of which were first mooted 18 years after the country joined the World Trade Organisation.

While exact details of the interim trade deal have not yet been officially published, it is clear it will contain certain yardsticks for Beijing to reach in terms of market opening and domestic policy changes.

The inclusion of such yardsticks in the deal, that is expected to be signed next month, has prompted comparison with goals China was required by Washington and other countries to meet in order to join the World Trade Organisation (WTO) in 2001.

The phase one deal was reached amid growing risks of China decoupling from the US in terms of trade and technology and as the country’s market-oriented domestic reform effort has lost momentum.

According to the statements released by China and the US, the phrase one deal will require China to significantly increase purchases of American products, improve intellectual property rights protection, further open up its financial market and make its exchange rate regime more transparent, echoing China’s promises when it negotiated its way into the WTO.