China and US can build on phase one trade deal to resolve their broader differences, analysts say

Interim agreement will help to ‘build some level of trust … provide a basis for reconciliation’, academic says

Deal also provides a platform for more regular dialogue, but ‘it remains to be seen if and how long these kind of talks can last’, observer says

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Observers say the phase one trade deal can help the US and China find ways to settle their other differences. Photo: Reuters

Published: 6:00am, 16 Jan 2020Updated: 4:06pm, 17 Feb 2020

After 18 months of trade war, the signing of a phase one deal between China and the United States will help to stabilise relations, ease tensions and provide a pathway for them to manage their differences in other areas, diplomatic observers say.

The agreement – signed on Wednesday by China’s top trade negotiator, Vice-Premier Liu He, US Trade Representative Robert Lighthizer and US Treasury Secretary Steve Mnuchin – includes a commitment by China to buy more American agricultural goods, energy and services and to make some reforms to its economic system.

Managing ties with the US is the top priority for Chinese leaders, amid rising calls for the two nations to decouple and Washington naming Beijing as a rival. US President Donald Trump is now in his election year and also fighting an impeachment battle.

Wu Xinbo, director of the Centre for American Studies at Fudan University, said the phase one deal would help to prevent the nations’ relationship from further deterioration, and that subsequent meetings could help them to iron out their other differences.

“This phase one deal is mainly to build some level of trust and to provide a basis for reconciliation,” he said.

“But the trade talks alone are not enough to solve the many structural issues that both sides have, as they only involve a limited number of ministries or departments.”

Even after the deal had been signed, the US would still be concerned about China’s state-led economic model, while China wanted to address issues such as US export controls and its ban on Chinese tech giant Huawei, Wu said.

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