Start trade talks soon, urges former US commerce chief
Top leaders of China and the United States should start direct dialogue on bilateral trade relations as soon as possible to avoid frictions that could lead to a trade war, former US secretary of commerce Carlos Gutierrez said on Friday.
Gutierrez, who served under former US president George W. Bush, said the two countries should finish talks on a bilateral investment treaty, which has been stalled due to the change of US administrations.
“The BIT is the beginning and it is the foundation for a free trade agreement (between the US and China). We should get started now, and the best first step is to finish the bilateral investment treaty,” Gutierrez told China Daily on the sidelines of the Boao Forum for Asia.
The trade relations between China and the US have faced uncertainty due in part to concerns about what policies President Donald Trump will pursue after his tough rhetoric during the election campaign.
Gutierrez said he expected a meeting between President Xi Jinping and Trump to take place soon, so that the two countries can start discussions on bilateral trade and investment issues.
The former US commerce secretary acknowledged the positive role of China’s Belt and Road Initiative in promoting global trade and growth for the economies participating in the initiative. He said he did not see why the initiative should conflict with any US interests.
Gutierrez added that the US eventually needs to work with China under the frame- work of multilateral organizations such as the Asian Infrastructure Investment Bank.
He also voiced support for globalization and agreed it remains one of the solutions to generate common benefits and spur global economic growth.
“Globalization remains the megatrend, and it will continue to be supported by technology,” he said, adding that governments should focus on improving education and tax and regulatory reforms to foster new businesses, and should generate new jobs instead of bashing globalization.
Despite the uncertainties in the Trump administration’s trade policy toward China, experts and analysts expressed optimism about the prospects for trade relations between the two countries.
“I am optimistic that the US policy may not be as adverse as the rhetoric,” said Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics in Washington, DC.
Zhao Kejin, deputy director of the Institute of International Relations at Tsinghua University, said governments should take measures to deal with the cost of free trade, including raising the compensation for workers who lose their jobs in the process and implementing reforms to expand employment at home.
The Belt and Road Initiative will fuel momentum for Eurasian Resources Group — the Kazakhstan government-controlled and diversified international mining company — to push ahead with several key projects in which Chinese companies play a critical role, its Chief Executive Officer Benedikt Sobotka said.
These include doubling the capacity of an aluminum plant in Kazakhstan, where the company started its business, building an integrated logistics network for an iron ore mine in Brazil and expanding cobalt production assets in Africa, Sobotka said.
Speaking on the sidelines of the Boao Forum for Asia 2017, Sobotka said Beijing’s initiative to strengthen ties among Eurasian economies was not just a political idea but a substantial business opportunity that has been put into reality.
“We have been working closely with Chinese partners on a number of highpriority projects. Our company is one of the biggest beneficiaries of this win-win initiative,” he said.
Some $3 billion of new projects in Kazakhstan will also include the expansion of its iron ore and chrome businesses, which are mainly focused on supporting the development of China’s steel, white goods and oil gas sectors, said Sobotka.
He said the cobalt mining project in Africa will make ERG the single largest supplier of cobalt to China by 2018, a key raw material for making electric vehicles that are needed by Beijing to meet its vision to make the economy and environment cleaner.
“In these cases, the Belt and Road Initiative will make a real difference to global development, because without Chinese partners we wouldn’t be able to secure such a sizable deal,” he said. “In turn, China could not achieve its goal to electrify its automobiles.”
China already accounts for around 30 percent of the total business of Luxem- bourg-headquartered ERG, whose largest shareholder is the Kazakhstan government.
In the past two years, ERG secured more than $2.5 billion in financing from Chinese banks for new projects in Africa and Kazakhstan.
But China’s role is not confined to just financing, but to sharing its knowledge on building plants and developing technologies.
The ERG leader said these projects, which are aimed at fueling industrialization and infrastructural growth and improving the livelihood of local communities, were great examples of the success of the Belt and Road Initiative.
One advantage of the initiative for Central Asian nations lies in the complementarity of natural resources and economic structures for economic and trade cooperation with China, said Li Tao, executive deputy director of the Institute of South Asian Studies at Sichuan University.
Meanwhile, ERG’s Sobotka said China would not just be one of the largest consumers of natural resources but an influential owner and investor that is looking into equity investments.
“Over time, China will liberalize its currency and financial market, so we may expect raw materials to be traded not just in US dollars but in Chinese yuan in the future,” he said.
Belt and Road Initiative will make a real difference to global development.” Benedikt Sobotka, CEO of Eurasian Resources Group