United States frustrated by China’s ‘lack of action’ on trade imbalance

Talks in Washington last month were ‘futile’ and there’s no sign that Beijing is prepared to change, officials say

PUBLISHED : Wednesday, 19 September, 2018, 11:00pm
UPDATED : Thursday, 20 September, 2018, 2:20pm

Washington is losing patience with China after seeing no sign of progress on structural reforms – even in talks last month – to address its trade imbalance with the United States, according to US officials.

The officials also said the White House would step up monitoring to see if China resorted to non-tariff barriers such as slowing down licence approvals for American companies as a trade war rages between the two countries.

The conflict between the world’s two biggest economies escalated on Monday when US President Donald Trump slapped tariffs on another US$200 billion of Chinese imports, and China responded by imposing tariffs of its own on US$60 billion of American goods.

That was despite an invitation from Washington last week for Beijing to return to the negotiation table, and trip by commerce vice-minister Wang Shouwen to the United States last month.

China still engages … like a developing nation without taking responsibilities in the global system
Senior US official

A senior US official said the talks with Wang were futile because the Chinese side focused on “technical” aspects and displayed little willingness to address structural reform.

“China still engages in the international economic systems like a developing nation without taking responsibilities in the global system,” the official said. “China needs to move.”

The official said China’s reluctance to change was also apparent in the strong presence of state-owned enterprises and the limited scope for private entrepreneurs in the Chinese economy.

US frustrations over China’s trade practices also surfaced on the sidelines of the World Economic Forum in Tianjin on Wednesday, when US congressmen Darrell Issa and Todd Rokita said China should stop “stealing and cheating”, and take timely action towards a ceasefire in the trade war with the United States.

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“Every action the US has done is measured and reasonable” and was based on “sound evidence”, Rokita said.

But Beijing hit back, with the Chinese foreign ministry saying US threats and rising rhetoric would not push China to make concessions.

“The US on one hand is calling for dialogue but on the other hand is raising the big stick of sanctions. It is on the one hand sending out an invitation but also raising pressure,” ministry spokesman Geng Shuang said.

With the special characteristics of the Trump administration, tangible results are difficult to reach
Ding Yifan of Tsinghua University’s National Strategy Institute

Ding Yifan, a senior researcher with Tsinghua University’s National Strategy Institute, said Wang had wanted to reach a compromise in Washington last month.

“China went with the intention of relieving pressure, and acting rationally ... but with the special characteristics of the Trump administration, tangible results are difficult to reach,” Ding said.

As the tensions rise, US businesses in China continue to worry about fallout on their operations.

Another senior American official said the US would watch for signs of Chinese trade retaliation via non-tariff barriers, such as delays in licence approvals or increases in unexpected inspections by Chinese authorities.

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The American Chamber of Commerce in China said on Tuesday that Beijing had plenty of measures to disrupt the operations of US firms.

Additional reporting by Jun Mai and Keegan Elmer