Resolving trade issues ‘a long-term effort’

China and the United States will continue trade talks even though it will take long-term efforts to solve the complex issue of bilateral trade, experts said on Tuesday.

The comments came after US Commerce Secretary Wilbur Ross concluded a series of meetings in Beijing with Chinese officials as part of ongoing trade discussions.

The meetings focused on reducing the US trade deficit by facilitating the supply of agricultural and energy products to meet China’s growing consumption needs, which will help support growth and employment in the US, the White House said in a statement released on Monday.

China said if the US introduces trade sanctions, including tariff increases, the economic and trade achievements negotiated by the two sides will not take effect, following the third round of high-level official talks concluded on Sunday.

Justin Yifu Lin, former chief economist and senior vicepresident of the World Bank from 2008 to 2012, said trade, in essence, has “economic rationality”. Even if China’s economic development caught up with the US, the bilateral trade would remain beneficial to each other. At that time, the US would gain more from that.

With regard to recent trade talks, Lin, now a professor at Peking University, said the main cause behind the widening US trade deficit lay within the country itself, where people “consume too much while saving only a bit.

“Since the 1950s, the US began to transfer its labor-intensive industries to Japan, and the latter then transferred these sectors to other Southeast Asian economies,” Lin said. “The industrial transfer leads to China’s trade surplus with the US … It is unfair to blame China.”

Robert Carnell, chief economist and head of research for Asia Pacific at ING Group, said that China’s moves in the past weeks have made it clear that it has no interest in a trade war.

“Despite some apparent progress in weekend talks on the bilateral Sino-US trade deficit, Trump’s revival of a plan to impose $50 billion of tariffs on Chinese goods has turned these negotiations on their head once more,” Carnell said in a research note.

“Trump will meet an angry and emotional group at the G7 meetings in Quebec this Friday ... I suspect there will be little sympathy for Trump unless he has a change of mind (again).”

Carnell said the current trade situation suggests that the legal framework of the World Trade Organization that has served the world trade for so long is crumbling.

Tu Xinquan, director of the China Institute for WTO Studies at the University of International Business and Economics, said China should be prepared for increasing unpredictability and uncertainty in the moves of the Trump administration.

“It is a rare phenomenon that the US is not only having trade disputes with China but also with its allies in the European Union and North America. It appears that the US is challenging the international trade system which it led in building after World War II,” he said.

Tu said the US policies have brought more uncertainties to the existing international trade order. China should be prepared for all kinds of outcomes, including the possibility of the US withdrawing from the WTO.