What to expect from China-US economic dialogue
The China-US Comprehensive Economic Dialogue takes place in Washington on Wednesday, the first meeting covering economic and trade issues since US President Donald Trump and Chinese President Xi Jinping agreed to transform the China-US Strategic and Economic Dialogue at their Mar-a-Lago Summit in Florida in April.
The new format high-level official dialogue indicates both sides are willing to deal with their economic and trade relations in a more pragmatic way. And it is important that Chinese and US high-level officials sit down and have a decent discussion, given the current complicated situation.
The protectionist philosophy of the White House has not shown any sign of abating. The Trump administration’s intention is to use unilateral means to maximize the United States’ interests, which has provoked anger from other countries, and in Hamburg earlier this month. Trump was more isolated at a G20 summit than any US president before. On first sight, Trump’s protectionism would seem to be of benefit to the US, but protectionism will exhaust the systemic bonuses and advantages the US has in the middle to long run.
The China-US Comprehensive Economic Dialogue can contribute to improving the current situation in four aspects.
First, China can elaborate on the dangers of protectionism, emphasize the importance of reciprocal and mutually advantageous trade and investment frameworks, persuade the Trump administration to keep the US market open and uphold the principle of non-discrimination, and urge the US to be cautious in using trade defense instruments. Especially, the Chinese side should ask the Trump administra- tion to deliberate on the 232 investigations underway and send out clear signals that any actions to curb steel and aluminum imports could lead to retaliation, which would be disastrous for US agriculture in particular.
Second, the dialogue is an opportunity for the Chinese side to persuade the Trump administration to recognize the US’ responsibility to the world and future generations in the fight against climate change, and they can remind the US of the potential rewards it stands to gain as a leader in the fight against climate change.
Third, both sides can set their watches. The Chinese side should clearly explain the progress and difficulties China faces in advancing its domestic reforms and economic transformation, and seek more concrete and workable cooperation areas for China and the US. The 100-Day Action Plan agreed at the Mar-a-Lago Summit was a good start. Both sides have reached consensus on 10 issues, including beef imports and the opening up of China’s financial services market. But those are not enough to stabilize the economic relations between the two counties. Both sides, especially at the working level, need to find more areas of agreement. For instance, China and the US both have a problem of production overcapacity. This common problem could be a good area for cooperation.
Fourth, China should clarify that the nuclear issue on the Korean Peninsula is not part of the China and US trade and economic issues. It should not be included in the two sides’ discussions on economic issues. The issue should be considered in diplomatic and regional security discussions, and should not influence the economic and trade relations between China and the US.
The new format high-level official dialogue indicates both sides are willing to deal with their economic and trade relations in a more pragmatic way.
The author is director of the department of American economic studies at the Institute of American Studies at the China Institutes of Contemporary International Relations.