Xi-Trump Meeting Chance to Reset Bilateral Ties

Global Times, April 6, 2017 | 作者: Teng Jianqun | 时间: 2017-04-10 | 责编: Wang Jiapei
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All eyes will be on the first summit meeting between Chinese President Xi Jinping and US President Donald Trump from Thursday to Friday as people wonder what the two leaders will achieve. Trade will surely be a key topic considering stalled Sino-US trade ties will not just affect the two countries' economies, but may also impact the future of the relationship.

While actively responding to the US' complaints about trade with China, the Chinese side should also put forward their demands and complaints on trade and economic issues. For instance, Chinese companies should receive fair treatment from US regulators when it comes to reviews of cross-border mergers and acquisitions. In recent years, Chinese companies have been inclined to buy more overseas high-tech companies, but a number of such deals have been blocked by increased security reviews by the US. As the overseas investments by Chinese companies have met headwinds from invisible political risks, multinational companies have preferred to not sell assets to Chinese buyers, who often are forced to offer higher bids for overseas assets. Moreover, the US should open its high-tech market to China. Chinese companies have made substantial advancements in high-tech fields over the past decades, and blindly shutting them out hinders technological progress and trade exchanges.

In terms of the scale of Sino-US trade, China's Commerce Minister Zhong Shan said in a recent news conference that the two countries account for 23 percent of the global population and 40 percent of the world economy. In 2016, bilateral trade between China and the US reached $519.6 billion, 207 times higher than in 1979 when bilateral diplomatic relations were established. Bilateral trade in services exceeded $110 billion in 2016 with two-way investment surpassing $170 billion.

Zhong also mentioned that the US has exported 26 percent of its Boeing aircraft, 56 percent of soybeans, 16 percent of vehicles and 15 percent of integrated circuits to China. Over the past decade, US exports to China grew at an average annual growth of 11 percent, while China's exports to the US grew by 6.6 percent annually. This should be considered as the most authoritative data about Sino-US trade, indicating the unprecedented interdependence and complementarities between the two countries in economic and trade areas. 

For a long time, the US blamed China for its trade deficit. Data released by the US Census Bureau showed that the US trade deficit with China reached $347 billion in 2016, significantly higher than that of other US trade partners. As such, China has been facing an increasing series of anti-dumping and countervailing probes from the US.

There are misunderstandings about Sino-US trade ties. Chinese Premier Li Keqiang said at a press conference after the fifth session of China's 12th National People's Congress that more than 90 percent of some Chinese companies' profits were taken by the US and statistics showed that last year Sino-US trade and investment created more than 1 million jobs in the US.

The Sino-US trade relationship faces uncertainties in 2017 given Trump's campaign criticism of China for the loss of manufacturing jobs, the trade deficit and the manipulation of its currency. Trade protectionism signals sent since Trump took office have further increased concern about anti-globalization around the world, with some even anticipating a trade war ahead. Nevertheless, the summit meeting between the two leaders has given Sino-US trade some optimistic hope, even though it will take time to address underlying problems between the two countries and even though trade frictions won't disappear in the near future.

Overall, Trump's trade strategy for dealing with China is still being formulated. Given the high degree of interdependence and complementarities in Sino-US trade, no one wants to risk triggering a trade war and both countries should be cautious about introducing any policies that would increase that risk. 

The development of Sino-US economic ties requires effort from both sides. The two countries should view each other from a new perspective on trade, especially in the sense that the US should accept China as a rising power in the world economy. On the other hand, in the face of Trump's protectionism trend, while making certain adjustments to the new situation, China should also ask for what it needs from bilateral trade.

The author is director of the Department for American Studies at China Institute of International Studies.



SourceGlobal Times, April 6, 2017.