China, US in video meet on trade, tariffs

Importance of boosting macro policy exchanges stressed in bilateral talks

“Whether China and the US can handle their economic and trade relations well will have a bearing on the future of the world.”

ZHANG YANSHENG Chief researcher, China Center for International Economic Exchanges

Vice-Premier Liu He, who is also a member of the Political Bureau of the Communist Party of China Central Committee and chief of the Chinese side of the China-United States comprehensive economic dialogue, had a video conversation with US Treasury Secretary Janet Yellen on the morning of Oct 26 at the invitation of the US side.

The two sides conducted practical, candid and constructive exchanges on the macroeconomic situation, and bilateral and multilateral cooperation. Both sides agreed that it is important for China and the US to strengthen macro policy communication and coordination as the world economic recovery is at a critical point of time.

The Chinese side expressed concern over issues including the lifting of additional tariffs and sanctions by the US side and the fair treatment of Chinese enterprises.

The two sides also agreed to maintain communication.

Experts have said China and the US should improve the bilateral economic and trade relationship not only for themselves, but also for the world’s economic recovery.

“Whether China and the US can handle their economic and trade relations well will have a bearing on the future of the world, and it is not a choice but a required task for the two countries to improve the relations,” said Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges.

China is the largest trading partner of about 130 economies, while the US has trade deficits with more than 100 economies. The two countries have contributed to nearly half of world economic growth in the past decade, Zhang said.

Business leaders have also said healthy economic and trade cooperation between China and US is important for businesses to grow.

Recent reports released by some foreign chambers of commerce, including in the US, the European Union and Japan, showed that nearly two-thirds of US enterprises, 59 percent of European enterprises, and 36.6 percent of Japanese enterprises plan to expand their investments in China, according to the Ministry of Commerce.

Woody Guo, senior vice-president of US-based Herbalife Nutrition, and president of its China branch, said the company is very optimistic about the Chinese market. It is also excited about the 4th China International

Import Expo to be held in Shanghai in November, Guo said.

He said China’s efforts to expand its domestic market will shore up consumption — including in the health industry, which will bring about huge business opportunities — and have firmed up the company’s determination to keep investing heavily in China.

Separately, experts at a forum said the trade conflict initiated by the United States is not producing the results it intended, and companies are not getting out of the supply chain in China. The online event on Oct 21 was organized by the Asia Society Texas Center and the George H.W. Bush Foundation for US-China Relations, also known as the Bush China Foundation.

Liza Mark, an attorney in Shanghai for law firm Haynes and Boone, said the strategy of using trade to force action by China is not having the effect the US had sought.

David Firestein, chief executive and president of the Bush China Foundation, said his organization had calculated the average annual trade deficit incurred during recent presidencies. Under the trade policies of the Trump administration, the US generated the highest average annual trade deficit, which was 17 percent higher than that of the Obama administration.

John Kent, director of Supply Chain China Initiatives and a professor at the University of Arkansas, said that while the word “decouple” seems to have become jargon in the US-China relationship over the past few years, decoupling has not happened nearly to the extent that some people had expected or even hoped for.

Getting the supply chain out of China “is not the mindset of the multinationals right now”, said Kent.