China still expects ‘phase one’ trade deal with US next month

The cancellation of the summit in Chile where leaders were supposed to meet has ‘zero impact’, says a Chinese official.

US President Donald Trump and China's Xi Jinping had been scheduled to meet and sign the first phase of a trade deal in Chile during a summit from November 16 to 17, which has now been cancelled [File: Kevin Lamarque/Reuters]
US President Donald Trump and China's Xi Jinping had been scheduled to meet and sign the first phase of a trade deal in Chile during a summit from November 16 to 17, which has now been cancelled [File: Kevin Lamarque/Reuters]

Chinese officials voiced optimism that Beijing and Washington can still find a way to clinch a so-called phase one trade deal next month, despite the abrupt cancellation of the summit where the heads of state were to meet to formally sign the deal.

China‘s cabinet adviser Zhu Guangyao told Reuters news agency on the sidelines of a forum in Singapore on relations between the United States and China that he is still optimistic that a deal can be signed in November if both sides maintain close communication via diplomatic channels.

“Based on (the principles of) mutual trust and mutual benefits, I believe both countries can achieve great success,” said Zhu, who was directly involved in the bilateral trade talks as a vice finance minister until his retirement in 2018.

In Beijing, China’s commerce ministry said bilateral trade negotiations with Washington will proceed according to plan and that the talks are progressing well.

The ministry, in a statement, said the two sides remain in close communication and that the lead trade negotiators will hold a telephone call on Friday.

The cancellation of the Asia-Pacific Economic Cooperation (APEC) summit in Chile – announced as social unrest continued to rock the capital Santiago – emerged as the latest twist in a 15-month-old trade dispute that has roiled markets and stoked fears about a global recession.

US President Donald Trump said this week he hoped to sign an interim trade deal with Chinese President Xi Jinping on the sidelines of the APEC summit. The White House said that the US still expects to sign a deal with China next month but no alternative location has been set yet for the leaders to meet.

Wei Jianguo, vice chairman of Chinese state-backed think-tank and forum cohost China Center for International Economic Exchange, told Reuters he believes the two countries can reach an agreement and the two leaders could meet and sign the deal on neutral soil.

“The cancellation of the Chile summit has zero impact on trade deal between China and the US,” said Wei. “There are lots of options out there for the two leaders to sign the deal. The deal can be signed in China, the US, or any third-party countries like Singapore.”

China will consider any offers from the US as long as they do not compromise Beijing’s core interests such as national security and territorial integrity, he said.

Meanwhile, the head of a Chinese government-backed trade association said Beijing could remove extra tariffs imposed since last year on US farm products to ease the way for importers to buy up to $50bn worth of such goods.

Trump said earlier this month that China had pledged to spend between $40bn and $50bn on US agricultural products annually as part of the deal to end the trade war.

Beijing slapped additional 25 percent tariffs on a list of US products including soybeans and other grains in July last year in response to tariffs Washington imposed on Chinese goods worth a similar value. China hiked some tariffs again in September this year.

Decoupling risk

Some policy hawks in Washington, DC have advocated a so-called decoupling of the US and Chinese economies, accusing Beijing of actively trying to steal US technology and creating one-sided economic and trade relations in Beijing’s favour. They have called for US firms to reduce their supply chain dependence on China and limit Chinese firms’ access to US technology.

But Chinese officials maintained that such a “decoupling” would be impossible and too damaging for both economies.

“(Decoupling) would be a disaster for both China and the US and the whole world,” former Chinese vice premier Zeng Peiyan told the forum on Wednesday, calling the idea “an extreme expression” of trade protectionism and unilateralism.

“We expect that the US will play a positive role, rather than focus on decoupling.”

Cabinet adviser Zhu also said that Beijing will further push forward plans to lure more foreign companies into the country next year.

Foreign firms and governments of China’s top trading partners have long complained of regulations and policy restricting market access to the world’s number two economy, though Beijing has repeatedly promised to open up its markets further. 

Source: Reuters

More from Economy
Most Read