Editorials: Cracking China’s great wall
President Xi talks of reducing trade restrictions and expanding imports
Americans up to their elbows in election alligators might have missed it: The great wall of Chinese trade just cracked. While voters were busy recalibrating the balance of power in President Trump’s Washington, China pledged to make its markets more accessible to international business. Promises made are not always promises kept, but this may signal that the president’s hard-nosed method of dealing with the most stubborn of global competitors is paying off. If daylight seeps through China’s formidable trade barriers, it would be good news for Americans and, ultimately, the global economy.
In a speech at the China International Import Expo in Shanghai on Monday, Chinese President Xi Jinping promised to cut its tariffs on imported products and streamline its customs procedures. “China has a big market of over $1.3 billion people and it is our sincere commitment to open the Chinese market,” Mr. Xi pledged before an audience of foreign leaders and international business executives. The leader of the world’s most populous nation said China would purchase $30 trillion in foreign products during the next 15 years. In any language, that’s a lot of money.
American leaders have long treated China’s foreign trade advantage over the United States like the weather — something to complain about without trying to do anything about it. But the blunt-spoken New Yorker, acknowledging the $350 billion-plus annual imbalance, also observed that the Chinese have made a killing with tariff and currency policies that require U.S. companies to hand over their trade secrets and even factories as the cost of doing business with China.
Not hesitating to reinforce bluster with brickbats, President Trump has imposed tariffs ranging from 10 percent to 25 percent on $250 billion worth of Chinese imports, and vows to do the same in 2019 on another $267 billion unless Beijing plays fair. Mexico, Canada and the European Union can expect similar treatment. The neighbors to the north and south have reached some accommodation with the United States, and the European Union is moving closer to doing so.
China alone has rebuffed the president’s relentless assault on unfair trade practices, calling it the “largest trade war in economic history.” Beijing has retaliated with new tariffs of its own worth $110 billion. Meanwhile, the 2018 U.S.-China trade imbalance continues apace, on track to surpass last year’s record of $375.6 billion, according to the U.S. Census Bureau.
Maintaining cordiality is a fundamental element of saving face in the East. Mr. Xi presents a friendly demeanor toward Mr. Trump, even playing a round of golf with him, while at the same time resisting any pressure to own up to the inequitable trade practices that have antagonized his U.S. partner. For his part, the usually tart-tongued Mr. Trump speaks of his Chinese counterpart only in warm and dulcet tones.
Accordingly, there’s hope that an anticipated meeting between the two at the Group of 20 summit in Buenos Aires later this month will improve the likelihood of a trade agreement. “I think we’ll make a deal with China,” says Mr. Trump.
Decorum is a valuable asset — even in the midst of a harrowing trade war — and neither Mr. Trump nor Mr. Xi seem willing to descend to the sort of Islamic invective that routinely erupts from Iran. The beleaguered nation clearly demonstrates that building up a nuclear program while testing intercontinental missiles and threatening to annihilate neighbors is usually not regarded as a way to win friends and influence people. And the habit of chanting “death to America” may help while away the hours on the streets of Tehran, but the entertainment may not be worth the hardship resulting from economic sanctions newly reimposed on the nation’s energy, shipping and banking sectors.
China’s 2 million-man army could never be mistaken for a conclave of Buddhist monks. The militarization of the South China Sea, with a rapidly expanding blue-water navy and an ambitious and growing air force, is the work of a nation seeking to exert global influence commensurate with its economic muscle.
It’s the way of the world, and so is the wisdom of expanded global trade. With the political die now cast in Washington, the leaders of the planet’s two most dominant economies have an opportunity to erase their tariff schemes and come to terms on trade. Prosperity will flourish if fairness prevails.