A good outcome to the trade dispute requires work by both sides

China Plus Published: 2019-01-10 22:38:28
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Note: The following is an edited translation of an article from the Chinese-language "Commentaries on International Affairs."

The vice-ministerial talks on China-U.S. economic and trade issues ended in Beijing on Wednesday. The talks were the first face-to-face meetings on these issues since President Xi and President Trump met in Argentina. Gao Feng, the spokesperson from China’s Commerce Ministry, said on Thursday that the extended talks demonstrate a commitment by the two sides to implement the consensus reached by the leaders of the two countries when they met during the G20 in Buenos Aires. And in another encouraging sign, Gao said the series of talks will continue as scheduled. Although little is known about the specifics of these latest talks, what is known suggests a renewed optimism that an agreement can be reached that will deescalate the tensions.

During the talks, the United States put forward what it calls 'structural issues' with China's economy. Some of these issues go straight to the heart of the structure of China’s economy, and are not up for negotiation. But others are already being addressed through China's policy of reform and opening up. For example, on the issue of intellectual property protection, the implementation of an innovation-driven development strategy has intensified the protection of intellectual property rights. Draft amendments to the Patent Law recently debated by China's legislature would introduce punitive damages for breaches of intellectual property rights, and would severely punish intellectual property infringement.

National flags of China and the U.S. [Photo: VCG]

National flags of China and the U.S. [Photo: VCG]

China's President Xi Jinping has said that China's reform process has "entered deep water". Reforms that deal with issues such as intellectual property protection, technical cooperation, market access, and non-tariff barriers must all be resolved in the process of achieving high-quality development in China. The reforms will raise challenges that the government and business sectors need to address, but this is an inevitable part of the process. The overlap between China's needs and America's wants shows that there is common ground between the two sides on some of the issues.

The reason why the two sides have started to make progress in the talks after more than nine months of escalating tensions is the growing pains caused by the dispute. American stocks have had a sharp adjustment since mid-October. The United States trade deficit reached 50.5 billion U.S. dollars in November – the highest monthly deficit in six years. And the American manufacturing purchasing managers' index (PMI) slowed to the lowest point in two years in December, while at the same time China's PMI fell back below 50 points and into the red last month. From a global perspective, the World Bank recently lowered its global economic growth forecast to 2.9 percent and 2.8 percent respectively for this year and 2020, which is 0.1 percentage points lower than the forecast in June last year. And there are growing concerns about the impact of the trade war on world financial markets and the broader global economy.

According to the agreement reached last year by President Xi Jinping and President Donald Trump, the two sides have a 90-day window to negotiate. The clock has reached the 40-day mark, which leaves little time for the two sides to reach a solid, workable agreement that meets both their needs. For its part, China has done its utmost to resolve the differences between the two sides. And the statement released by the Chinese side suggests that it is optimistic continuing progress can be made. But success relies on both sides doing the hard work that’s required to make a lasting deal.

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LU Xiankun Professor LU Xiankun is Managing Director of LEDECO Geneva and Associate Partner of IDEAS Centre Geneva. He is Emeritus Professor of China Institute for WTO Studies of the University of International Business and Economics (UIBE) and Wuhan University (WHU) of China and visiting professor or senior research fellow of some other universities and think tanks in China and Europe. He also sits in management of some international business associations and companies, including as Senior Vice President of Shenzhen UEB Technology LTD., a leading e-commerce company of China. Previously, Mr. LU was senior official of Chinese Ministry of Commerce and senior diplomat posted in Europe, including in Geneva as Counsellor and Head of Division of the Permanent Mission of China to the WTO and in Brussels as Commercial Secretary of the Permanent Mission of China to the EU. Benjamin Cavender Benjamin Cavender is a Shanghai based consultant with more than 11 years of experience helping companies understand consumer behavior and develop go to market strategies for China. He is a frequent speaker on economic and consumer trends in China and is often featured on CNBC, Bloomberg, and Channel News Asia. Sara Hsu Sara Hsu is an associate professor from the State University of New York at New Paltz. She is a regular commentator on Chinese economy. Xu Qinduo Xu Qinduo is CRI's former chief correspondent to Washington DC, the United States. He works as the producer, host and commentator for TODAY, a flagship talk show on current affairs. Mr. Xu contributes regularly to English-language newspapers including Shenzhen Daily and Global Times as well as Chinese-language radio and TV services. Lin Shaowen A radio person, Mr. Lin Shaowen is strongly interested in international relations and Chinese politics. As China is quite often misunderstood in the rest of the world, he feels the need to better present the true picture of the country, the policies and meanings. So he talks a lot and is often seen debating. Then friends find a critical Lin Shaowen criticizing and criticized. George N. Tzogopoulos Dr George N. Tzogopoulos is an expert in media and politics/international relations as well as Chinese affairs. He is Senior Research Fellow at the Centre International de Européenne (CIFE) and Visiting Lecturer at the European Institute affiliated with it and is teaching international relations at the Department of Law of the Democritus University of Thrace. George is the author of two books: US Foreign Policy in the European Media: Framing the Rise and Fall of Neoconservatism (IB TAURIS) and The Greek Crisis in the Media: Stereotyping in the International Press (Ashgate) as well as the founder of chinaandgreece.com, an institutional partner of CRI Greek. David Morris David Morris is the Pacific Islands Trade and Investment Commissioner in China, a former Australian diplomat and senior political adviser. Harvey Dzodin After a distinguished career in the US government and American media Dr. Harvey Dzodin is now a Beijing-based freelance columnist for several media outlets. While living in Beijing, he has published over 200 columns with an emphasis on arts, culture and the Belt & Road initiative. He is also a sought-after speaker and advisor in China and abroad. He currently serves as Nonresident Research Fellow of the think tank Center for China and Globalization and Senior Advisor of Tsinghua University National Image Research Center specializing in city branding. Dr. Dzodin was a political appointee of President Jimmy Carter and served as lawyer to a presidential commission. Upon the nomination of the White House and the US State Department he served at the United Nations Office in Vienna, Austria. He was Director and Vice President of the ABC Television in New York for more than two decades.