What China wants from Donald Trump in return for deals that will help him cut the US trade deficit
The US president is eager to reduce the gap between the two countries. In return Beijing is seeking concessions in the hi-tech sphere
China and the United States inked US$9 billion of deals on Wednesday afternoon, hours after US President Donald Trump landed in Beijing to kick off his visit in Beijing.
The two countries reached 19 deals covering bioscience, aviation and smart manufacturing in the Great Hall of People, overseen by Wang Yang, China’s vice-primer in charge of economic issues, and US Commerce Secretary Wilbur Ross, the official media said.
Wang Yang, the newly elected member of the powerful Politburo, told the commercial delegates from both countries that today’s contract signing was just a “warm-up” and there would be more good things tomorrow, indicating more significant deals to be unveiled soon.
JD.com Inc. will buy US$2 billion of U.S. goods, more than half of which is beef and pork, in a deal that coincides with President Donald Trump’s visit to China.
“China’s shoppers will rest assured knowing that they are able to purchase safe, high-quality meat products imported from the U.S.,” JD.com Chief Executive Officer Richard Liu said in the statement.
Trump is travelling with representatives from 30 companies to Beijing, where trade disputes with China is one of the key agenda.
The deals will help to address the US trade deficit with China, an issue high on Trump’s agenda.
But China has a different view on how to address the economic imbalance.
It has proposed broader economic interaction between the two countries and also wants to buy more manufactured products and energy from the United States. Here are its other demands.
1. Washington to lift export restrictions on hi-tech products
China has been calling on Washington to loosen caps on US hi-tech exports for years, a move that would allow the US to export more products to China and reduce its trade deficit.
2. More cooperation in research and development in fields such as space and aviation
Former vice-commerce minister Wei Jianguo has suggested both countries should cooperate in aviation and aerospace, new energy technology, smart cities and sustainable development.
China is aiming to move up the industrial chain and become more innovative. But its major trading partners such as the US and the European Union are concerned about China’s industrial state subsidies and are worried about the national security implications of its growing appetite for foreign technology.
3. US participation in the ‘Belt and Road Initiative’ and Asian Infrastructure Investment Bank
President Xi Jinping said in April during his first meeting with Trump that China would welcome US involvement in the “Belt and Road Initiative”, a massive infrastructure and trade project to link nations from Asia to Africa. China also hopes for greater access to US infrastructure construction work.
The China-backed Asian Infrastructure Investment Bank has so far persuaded 80 countries to join, making it the biggest rival to the US-dominated World Bank and Japan-influenced Asian Development Bank. The US and Japan are the only two major countries that have stayed away from it.
Chinese analysts have suggested that the two countries should jointly explore markets in third countries, but the US has given the suggestion the cold shoulder.
4. Toning down the Section 301 probe into alleged Chinese IP violations
The US launched an investigation into alleged Chinese intellectual property theft earlier this year, which would allow Trump to impose punitive tariffs on Chinese exports. Beijing hopes to handle the issue through the World Trade Organisation’s dispute resolution mechanism and wants to avoid intensifying the confrontation with Washington.