China-US rice deal plants the seeds of change

China Daily (Hong Kong) - - COMMENT -

Trade talks held in Wash­ing­ton ear­lier this month pro­vided an open goal for head­line writ­ers. “China to im­port Amer­i­can rice”, or some vari­ant thereof, was how many of the US me­dia out­lets greeted the pos­i­tive out­come of a wide-rang­ing bi­lat­eral eco­nomic di­a­logue.

The con­cept of China, birth­place of rice cul­ti­va­tion and now its largest pro­ducer and con­sumer, ship­ping in sup­plies from the United States was news­wor­thy from the nov­elty as­pect alone. In fact, China has been im­port­ing rice from other coun­tries and re­gions for some time to meet the de­mands of a grow­ing pop­u­la­tion and an in­creas­ingly in­dus­tri­al­ized econ­omy. Pur­chases, prin­ci­pally from Asian neigh­bors, have al­ready turned it into the world’s big­gest rice im­porter.

The Wash­ing­ton rice deal is the cul­mi­na­tion of a decade of ne­go­ti­a­tions. Ship­ments will go ahead once Chi­nese of­fi­cials have in­spected pro­duc­tion fa­cil­i­ties in the US. The agree­ment is im­por­tant as much for its sym­bolic value as for the sums in­volved. Over­all, the US ex­ports 3 mil­lion to 4 mil­lion met­ric tons of rice a year, while China pro­duces about 206 mil­lion tons.

How­ever, the deal un­der­lines a pos­i­tive shift in ex­pec­ta­tions for the fu­ture of the US-China eco­nomic re­la­tion­ship af­ter the dire threats of a trade war that emerged dur­ing Don­ald Trump’s suc­cess­ful “Amer­ica First” pres­i­den­tial cam­paign last year.

The Wash­ing­ton talks — of­fi­cially termed the US-China Com­pre­hen­sive Eco­nomic Di­a­logue — were the fruit of the first meet­ing be­tween Trump and Pres­i­dent Xi Jin­ping in April. Meet­ing at Trump’s Flor­ida re­sort of Mar-a-Lago, the two lead­ers agreed to es­tab­lish the di­a­logue to re­solve dif­fer­ences on per­haps the most cru­cial area of bi­lat­eral re­la­tions — trade.

Dis­cussing a one-year ac­tion plan for fu­ture eco­nomic co­op­er­a­tion, the two sides agreed to ad­dress a trade im­bal­ance that cur­rently works in China’s fa­vor. Trump com­plained, dur­ing his cam­paign, of un­fair com­pe­ti­tion from Chi­nese pro­duc­ers that he said had im­pov­er­ished tra­di­tional US man­u­fac- tur­ing states. China’s stated pol­icy, mean­while, has been that trade re­la­tions should be es­tab­lished on a “win-win” ba­sis that prof­its both sides.

A state­ment from the US Depart­ment of Com­merce said the Chi­nese team had “ac­knowl­edged our shared ob­jec­tive to re­duce the trade deficit, which both sides will work co­op­er­a­tively to achieve”. Ac­cord­ing to the state­ment, the first 100 days since the Mar-a-Lago sum­mit had seen progress on a num­ber of im­por­tant is­sues, in­clud­ing credit rat­ings, bond clear­ing, elec­tronic pay­ments, com­mer­cial bank­ing and liq­ue­fied nat­u­ral gas. It also noted that China was al­low­ing im­ports of US beef for the first time since 2003.

“The prin­ci­ples of bal­ance, fair­ness and rec­i­proc­ity on mat­ters of trade will con­tinue to guide the Amer­i­can po­si­tion so we can give Amer­i­can work­ers and busi­nesses an op­por­tu­nity to com­pete on a level play­ing field,” the Depart­ment of Com­merce said.

The Chi­nese side, for its part, said it looked for­ward to an ex­pan­sion in the trade in ser­vices with the US. Ac­cord­ing to a state­ment from the Chi­nese del­e­ga­tion, ex­pand­ing bi­lat­eral trade in ser­vices could help pro­mote bal­anced trad­ing re­la­tions be­tween the two coun­tries.

The two sides also agreed to cre­ate a more open in­vest­ment en­vi­ron­ment and to fi­nal­ize an in­vest­ment treaty that has sup­port among US and Chi­nese busi­nesses. The di­a­logue showed both sides rec­og­nize that cur­rent trade im­bal­ances were un­sus­tain­ably large and could dam­age the prospects for co­op­er­a­tion in other vi­tal ar­eas such as diplo­macy and se­cu­rity.

For China, “win-win co­op­er­a­tion” re­mains a fun­da­men­tal for­eign pol­icy ob­jec­tive.

In the over­all con­text of the mam­moth prob­lems that Wash­ing­ton and Bei­jing have to re­solve to put their eco­nomic ties on a new foot­ing, the deal on rice might seem in­signif­i­cant and even triv­ial. But it pro­vides a handy sym­bol for the open­ing of a more bal­anced and mu­tu­ally ben­e­fi­cial bi­lat­eral trade re­la­tion­ship.

The au­thor is a se­nior edi­to­rial con­sul­tant for China Daily. har­vey­mor­


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