China, US should meet in the middle

China and the United States, which saw their bilateral relations haunted by an escalating trade conflict in 2018, should meet halfway in order to bring the ties back on track, according to leading experts in the two countries.

President Xi Jinping and US President Donald Trump both spoke positively of their phone conversation on Dec 29, during which they hoped an agreement beneficial to both nations and the world could be reached.

On Tuesday, the two leaders also exchanged congratulations on the 40th anniversary of the two countries establishing diplomatic relations.

The US has imposed punitive tariffs on $250 billion of Chinese exports since July, and China retaliated by levying new tariffs on $110 billion of US exports. The tit-for-tat tariffs have triggered grave concern of an all-out

trade war between the world’s two largest economies.

Xi and Trump, when meeting on the sidelines of the G20 summit in Buenos Aires on Dec 1, agreed to refrain from imposing new tariffs, a move described by some as a 90-day truce after the two countries imposed punitive tariffs on each other’s goods.

“President Trump’s upbeat assessment of this most recent conversation with President Xi gives rise to the hope that bilateral trade tensions soon will be ratcheted down significantly,” said Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics, referring to Trump’s upbeat tweet after the phone talk with Xi.

Lardy believes that the way out is for each side to compromise, but he said it won’t be easy, due to domestic reasons in both countries.

“I fear each side has an insufficient understanding of the nature of policymaking in the other country, which increases the risks of the current situation,” said Lardy.

Meanwhile, in his congratulatory message on the 40th anniversary of the establishment of China-US ties, Xi said the relations have experienced ups and downs and made historic progress over the past 40 years, bringing huge benefits to the two peoples and contributing greatly to world peace, stability and prosperity.

History has proved that cooperation is the best choice for both sides, Xi said.

“I attach great importance to the development of China-US relations and am willing to work with President Trump to summarize the experience of the development of ChinaUS relations and implement the consensus we have reached in a joint effort to advance China-US relations featuring coordination, cooperation and stability, so as to better benefit the two peoples as well as the people of the rest of the world,” Xi said.

Trump said great progress has been made in the development of the bilateral ties. He added that it is his priority to promote cooperative and constructive US-China relations.

Douglas Paal, vice-president for studies at the Carnegie Endowment for International Peace, believes the bilateral relationship is already past the crossroads, and the issue now is whether the two sides can find a way to manage the costs of contention.

“There are vested interests on both sides which see benefits in greater friction. Leaders need to control them better in the pursuit of peace at acceptable costs,” he warned.

Cheng Li, director of the John L. Thornton China Center of the Brookings Institution, went a step further, describing the bilateral relations as “at cliff’s edge” and adding, “It requires prompt measures by leaders of the two countries to pull it back.”

Shen Dingli, a professor of international relations at Shanghai-based Fudan University, said many in the US think that China aspires to replace the US as the world’s top leader. “Therefore, Washington has to do whatever it takes to stop Beijing,” said Shen, clearly referring to the China containment strategy that many in China believe the US has been pursuing.

Many Chinese officials and pundits believe that the US has misread China’s intentions. Foreign Minister Wang Yi said at the New Yorkbased Council on Foreign Relations on Sept 28 that “China will neither become another US, nor challenge or replace the US”.

Li, of Brookings, believes it’s premature to say that the US has formed a containment strategy. “If this were true, there would be no incentive to cooperate anymore,” he said.

He noted that while Republicans and Democrats share some views on China, there is no consensus on “waging a trade war” or the “decoupling” of the two economies, adding that a decoupling would be disastrous for the world economy.