What to ex­pect from China-US eco­nomic di­a­logue

China Daily (Hong Kong) - - VIEWS -

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.

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