Beijing welcomes Mnuchin visit for crunch trade talks
BEIJING: Beijing yesterday said it would welcome a visit from US Treasury Secretary Steven Mnuchin, who said he was considering a trip to the Chinese capital to hold talks on the trade dispute seen as a threat to the global economy. Tensions between the world’s two largest economies have cast a shadow over the gathering of finance ministers in Washington, with concerns a trade war could undercut the global recovery.
Mnuchin had said Saturday during the spring meetings of the International Monetary Fund and World Bank in the US capital that “a trip is under consideration”. The Chinese Commerce Ministry yesterday welcomed the move. “China has received the information that the US side wish to come in Beijing in order to conduct economic and trade consultations. China welcomes this.”
US President Donald Trump last month approved steep tariffs on tens of billions of dollars of Chinese imports, while Beijing has slapped duties on key US agricultural exports and has threatened to do likewise for the sensitive American soybean industry. Among 18 bilateral meetings with his counterparts this week, Mnuchin said he had met with Chinese central bank chief Yi Gang. While the meeting with Yi did not focus on trade with China, Mnuchin said he remains “cautiously optimistic” about the issue. “The discussions were really around the governor’s actions at the PBOC and certain actions they’ve announced in terms of opening their markets which we very much encourage and appreciate,” Mnuchin said. He also confirmed that the United States now supports a $13 billion capital increase for the World Bank in tandem with a set of reforms, including reducing lending to wealthier countries-a move widely seen as targeting China. “I look at this as a package transaction... we support a capital increase on the World Bank along with the associated reforms that they’re talking about making,” Mnuchin said, adding that he was hopeful Congress would approve the increase.
IMF meeting
The gathering of world finance ministers began with heightened anxiety about the potential damage a USChina trade war could do to the economic recovery but ended Saturday with a door open to negotiations. International Monetary Fund chief Christine Lagarde, who has been urging countries to avoid damaging protectionism, said this weekend’s spring meeting had “made progress towards dialogue.”
The heated trade rhetoric comes at a delicate moment, as Washington and Beijing are both seeking to address North Korea’s nuclear program-which Pyongyang said Saturday it would largely scale back. The IMF’s governing committee in a statement at the conclusion of the ministerial meeting highlighted the risks presented by “increasing trade and geopolitical tensions.” Lagarde in recent weeks has repeatedly urged member countries to steer clear of protectionism and warned the uncertainty around trade disputes could choke off investment, a key drivers of the current recovery.
“My key concern...is to help in the process of resolving those issues before they escalate to a point where they would hamper growth and stability,” she told reporters at the conclusion of the meeting. The IMF projects global growth of 3.9 percent this year and next but warns that the risks are tilted to the downside.
‘Cautiously optimistic’
Mnuchin differed markedly from his counterparts, saying the risk to global growth was from unfair trade practices, rather than the trade tensions. But his announcement of a possible China trip could reduce the heat in the dispute. While the timing of his visit to Beijing is unclear, and he did not provide details on the topics to be discussed, he said “a trip is under consideration.”
Among 18 bilateral meetings with his counterparts this week, Mnuchin said he had met with Yi Gang, governor of the People’s Bank of China. The meeting with central bank chief Yi did not focus on trade, but Mnuchin said he remained “cautiously optimistic” about the issue.
“The discussions were really around the governor’s actions at the PBOC and certain actions they’ve announced in terms of opening their markets which we very much encourage and appreciate,” Mnuchin said.
In his statement to the International Monetary Fund, Yi also warned that “an escalation of trade frictions caused by unilateral actions” posed a risk to the global economic outlook and called on countries to use “rules-based” multilateral organizations to resolve differences. But he said China was committed to a series of reforms similar to those called for by the United States, including lower tariffs and protections for American technology. “China will vigorously push forward the reform and opening-up of the financial sector, significantly relax market access restrictions, create a more attractive investment environment, strengthen the protection of intellectual properties and actively expand imports,” Yi said.