US-China trade talks opportunity for Beijing to ‘negotiate and manage’ growing hostilities
- Beijing is expected to use upcoming trade talks between China and the US to prevent bilateral relations from collapsing completely, analysts say
- Relations have sunk to all time lows in recent weeks as the two nations spar over the coronavirus pandemic, Hong Kong, Xinjiang and technology
China is expected to use the upcoming trade talks with the United States as a chance to prevent, or at least slow, a full-fledged confrontation erupting between the world’s two largest economies, analysts said.
The meeting, a semi-annual review agreed upon when the deal was signed in January, was expected to discuss, among other obligations, progress on Washington’s demands that China buy US$200 billion worth of American goods and services over the next two years.
China, which has promised to honour the agreement, is lagging far behind on the purchases as the coronavirus has dampened demand.
The meeting, even if delayed, is a gesture that bilateral issues can be negotiated and managed
While trade may be at the top of the agenda, the talks will be a rare platform for senior officials to tone down growing bilateral hostilities and for Beijing to keep relations on track ahead of the US presidential election on November 3, according to analysts.
“The meeting, even if delayed, is a gesture that bilateral issues can be negotiated and managed,” said Wang Yiwei, a professor of international relations at Renmin University of China.
If Vice-Premier Liu He, President Xi Jinping's top economic aide, talks to US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin, it could deliver a strong message that China is willing to “address some concerns of the United States”, Wang said.
On top of the phase one trade deal, negotiations may also discuss long-term structural issues in the Chinese economy and potential cooperation on global matters, he added.
China has recently signalled it is willing to keep communication open with the US as relations deteriorate to their lowest point in decades.
However, the olive branch has not been accepted by the US, which has continued to punish Chinese businesses ranging from Huawei to Tiktok, revoked special treatment of Hong Kong and carried out military drills in the disputed South China Sea.
Trump said this week “I don’t want to talk to China right now”.
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Wendy Cutler, vice-president of Asia Society Policy Institute and a former acting deputy US trade representative, said last week the trade agreement “is one of the remaining bright spots where the two sides continue to engage constructively”.
China has been stepping up purchases of American farm produce in recent weeks, but is still far off meeting its agreement for an additional US$77 billion of goods this year.
Hua Changchun, chief economist at Chinese brokerage Guotai Junan Securities, said Trump was unlikely to impose new tariffs on Chinese goods since it would deal another blow to the US economy, and China now has the upper hand in the talks.
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“Trump is now in urgent need for bigger Chinese purchases to please voters of swing states,” he wrote in an article published by Ta Kung Pao, a Hong Kong newspaper backed by Beijing.
However, China will avoid leaving any impression that it is helping Trump to win re-election, said Chen Fengying, a senior fellow at the China Institute of Contemporary International Relations, a Beijing think-tank.
“China’s best strategy is to stick to its position amid the shifting events,” Chen said.
Neither Beijing or Washington has released a date for the talks, which were originally expected to happen around August 15.
