China’s US trade deal commitments more than 30 per cent short of year-to-date target, report says

China’s total purchases of US goods in 2021, as of the end of May, reached only 69 per cent of the pledged total, according to Chinese import data
Energy purchases reached just 34 per cent of China’s five-month target, based on US export data, but Chinese import data put that figure at 54 per cent

US-China relations

Andrew Mullen

Published: 2:24pm, 30 Jun 2021

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China was more than 30 per cent short of its 2021 commitments under the phase-one trade deal with the United States during the first five months of the year, according to new analysis of trade data between the world’s two largest economies.

The US and China signed their long-awaited deal in January 2020, and the terms outlined in the agreement took effect one month later.

As part of it, China committed to buying an additional US$200 billion worth of goods and services over 2020-21, relative to 2017’s levels.

But according to a report released by the Peterson Institute for International Economics (PIIE) on Tuesday, China’s purchases of US goods from January to May reached only 69 per cent of the year-to-date target based on Chinese import data, and only 62 per cent of the target based on US export data.

An earlier PIIE report in February, which similarly was compiled by economist Chad Bown, said that a large part of the phase-one trade deal that entered into force a year prior was a “failure”, after US exports of phase-one goods to China in 2020 fell more than 40 per cent short of the target.

According to the latest PIIE report, agriculture purchases under the phase-one trade deal reached 84 per cent of the 2021 commitment up until the end of May based on Chinese import data, and 86 per cent of the target based on US export data.

Purchases of covered manufactured goods reached 67 per cent of the five-month target based on Chinese import data, and 65 per cent of the target based on US export data.

Energy purchases, meanwhile, showed that China met 54 per cent of the target based on Chinese import data, but just 34 per cent of the target based on US export data.

Through May 2021, China’s total imports of covered products from the United States were US$56.9 billion, compared with a year-to-date target of US$82 billion

PIIE report

“Through May 2021, China’s total imports of covered products from the United States were [valued at] US$56.9 billion, compared with a year-to-date target of US$82 billion,” the report said.

“Over the same period, US exports to China of covered products were [valued at] US$44.4 billion, compared with a year-to-date target of US$71.3 billion.”

In May, China’s trade surplus with the US rose to US$31.78 billion from US$28.11 billion in April. Its imports from the US rose by 40.53 per cent to US$13.11 billion in May, while exports rose by 20.6 per cent to US$44.89 billion, according to data from China’s National Bureau of Statistics.

After some nine months of silence, despite the phase-one trade deal calling for top-level contact every six months, China and the US held three rounds of trade talks in late May and early June.

Chinese Vice-Premier Liu He and US Trade Representative Katherine Tai held a “candid and constructive” exchange on May 27, which was the first time top trade negotiators from China and the US had formally spoken since Joe Biden entered the White House.

Then, on June 2, Liu also had “candid” exchanges on issues of concern with US Treasury Secretary Janet Yellen.

A further “candid and pragmatic exchange of views” took place between Commerce Minister Wang Wentao and his American counterpart, Gina Raimondo, on June 10.

This article appeared in the South China Morning Post print edition as: China falls short on pact targets