China, US reach win-win trade victory

China and the United States issued a joint statement on Saturday vowing to take effective measures to substantially reduce the trade deficit between the two nations. According to the statement, China agreed to greatly increase its purchases of US goods and services to meet the growing demand of Chinese consumers and promote high-quality economic development. This will also create benefits for the US economy and job market.

The two nations agreed to increase the export of US agriculture and energy products. They also agreed to create favorable conditions for expanding trade in manufacturing goods and services. The statement said that both sides reached consensus on intellectual property protection and promoting cooperation in this regard.

Trade between the two countries has continued to grow since China launched its reform and opening-up policy, allowing it to become the largest bilateral trader of goods in the world. In recent years, both nations’ service trade markets have shown substantial growth. China’s surplus of trade in goods with the US has gradually expanded due to several factors, making it the world’s largest trade surplus.

According to China’s statistics, China’s merchandise trade surplus with the US reached $275.8 billion in 2017 while US statistics showed that the US trade deficit with China was as high as $375.2 billion in 2017, about half the US global trade deficit. It’s difficult to maintain such an unbalanced bilateral trade system.

The US is experiencing strained relations with its trade partners around the world, especially with China. Early this year the US unilaterally imposed import tariffs on steel and aluminum products. China took countermeasures in response to US policies. The trade spat severely impacted the overall relationship between the two nations and sent shockwaves throughout the global market.

China and the US have gone through three rounds of consultations so far, starting with Chinese Vice Premier Liu He’s trip to the US in February, the US delegation team’s visit to China in early May and the vice premier’s most recent US visit last week.

These consultations allowed the world’s two largest economies to consult each other about the analysis, definition and resolution of issues in the long-term operation of their current trade mechanisms.

Economic and trade cooperation has always played the role of ballast and propeller in China-US relations. However, recent economic and trade issues have continued to challenge the maintenance of a good and comprehensive relationship between the two countries. It’s imperative these issues are resolved. If the two countries work together to keep trade relations stable, then the China-US bilateral relationship will be much stronger, and both sides can benefit from this win-win cooperation.

From this perspective, the agreement signed by China and the US has followed the win-win principle. The US will have the opportunity to reduce its trade deficit with China, while China will achieve the consistent purchase of US goods to benefit the development of the country and its people’s life.