Coronavirus: China will ‘definitely’ meet US trade deal agricultural demands, but may invoke force majeure

China has agreed to buy an additional US$32 billion in US farm goods over a two-year period, but demand is likely to be complicated by coronavirus outbreak

Wei Jianguo, former deputy minister responsible for foreign trade, suggested China could invoke force majeure on other items due to coronavirus impact on economy

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According to the terms of the phase one deal, China will buy an additional US$200 billion American goods and services over two years, including US$32 billion in agricultural products. Photo: EPA

Published: 9:15pm, 28 Feb 2020Updated: 10:11am, 2 Mar 2020

China will “definitely” honour its agricultural purchase commitments as part of its phase one trade deal signed with the United States in January, despite the coronavirus epidemic, a former senior Chinese government official said on Friday.

Wei Jianguo, a former deputy minister responsible for foreign trade at the Ministry of Commerce, told a press conference in Beijing that China was fully committed to the deal.

However, the coronavirus outbreak that followed the signing of the deal in Washington may mean China has to invoke a force majeure clause in the trade deal with regard other planned purchases, “if some parts fail to happen”, Wei said, adding that Beijing will redouble its efforts to implement the deal “once the coronavirus epidemic is over”.

“China is fully able to complete the agreed amount of agricultural product imports [from the US],” Wei said, without mentioning purchases of non-agricultural products, such as manufactured goods and energy.

Wei’s comments mark the first on-the-record confirmation from Beijing insiders that China has no plan to walk away from the trade deal because of the coronavirus epidemic, which has caused huge damage to its economy.

It is also the latest suggestion, however, that China may look to a clause in the deal which states that both parties will enter consultations if “a natural disaster or other unforeseeable event outside the control of the parties delays a party from timely complying with its obligations”.