Trump needs pact with China to remain to aid his reelection campaign
Date: Aug 14 2020 By: GLOBAL TIMES
A positive atmosphere has emerged ahead of an upcoming online meeting between Chinese and US trade representatives. Both sides have expressed their anticipation and understanding in the run up to the dialogue despite months-long tit-for-tat relations, and it is widely predicted that the phase one deal will carry on smoothly.
The review meeting itself means much more than its content as it signals the world's two largest powers are now able to sit down and calmly conduct dialogues on key issues in spite of escalating tensions, Chinese experts said.
The phase one trade deal signed in January was hard won, the experts said, and neither country is willing to sacrifice it amid souring ties as it is a crucial factor for China-US trade and economic relations, which ensure the stability of China-US relations.
Regardless of the US' consecutive moves to prompt bilateral fallout in recent months - from shifting the blame to China for its own inadequate COVID-19 response to cracking down on Chinese high-tech firms - China has attached great importance to implementing the pact.
White House economic advisor Larry Kudlow on Thursday said the Trump administration is satisfied with China's progress in meeting commitments to purchase US goods in the phase one trade deal.
The Chinese government has always kept its promises with regard to the phase one trade deal, and has endeavored to import goods from the US despite the COVID-19 pandemic weakening domestic demand in the first few months of the year, said Wei Jianguo, former Chinese vice minister of commerce and executive deputy director of the China Center for International Economic Exchanges.
"China has now chosen to solve the issues and compare notes via dialogue, indicating the country's calm mind and fundamental hope: that negotiations and communications will continue," Wei told the Global Times on Friday.
The upcoming dialogue may focus on how the trade agreement has been carried out so far and what both sides will do in the rest of the year, according to Gao Lingyun, an expert at the Chinese Academy of Social Sciences (CASS).
Commenting on some US media reports claiming China is lagging in its annual fulfillment of purchase requirements under the deal, Gao said, "There is no stipulation in the agreement that China should purchase at a particular speed, and the pace is forecast to pick up in the second half."
By the end of the first half, China had purchased about 23 percent of a total target of $170 billion of goods in 2020, according to Bloomberg calculations based on China Customs data, showing an uptick on a month-on-month basis from the 19 percent by May.
For farm imports specifically, US soybeans, which account for about half of US agricultural goods shipped to China, have witnessed a recent buying spree.
However, as the coming trade talks near, the Trump administration has taken a series of measures targeting Chinese tech giants such as TikTok and WeChat. It is widely believed that these moves to crack down on Chinese high-tech firms will be another important issue on the agenda for the talks, market watchers said.
"The Chinese negotiators could reaffirm the trend and importance of China-US collaboration on high tech in the future rather than continue confrontation, especially as the US is unilaterally piling pressure on Chinese tech firms through state apparatus," said Wei.
"China is expected to express its determination to further open up, welcoming foreign investment including investment from the US," he added.
However, analysts said the Trump administration is also under fire from US companies, which puts Washington in an awkward situation as it waits to see how far it can play the China card.
The Wall Street Journal reported that these US companies, whose fortunes are linked to China, are pushing back against the government's plan to restrict business transactions involving the WeChat app from Tencent Holdings, saying it could undermine their competitiveness in the world's second-biggest economy.
The possibility that the US will require more from China and present a hard stance during the upcoming meeting cannot be ruled out, as the Trump administration will seize the opportunity to play the China card and thus gain political capital, experts said.
"On the one hand, the US will maximize public opinion by suppressing China. On the other hand, it will minimize the economic impact. It has expectations for China's procurement and is very worried that we will not implement that," said Gao.
For the future implementation of the trade deal, difficulties stemming from the COVID-19 pandemic - as well as some of Trump's China hawks who could pose a threat as they intend to decouple from China - are not conducive to a positive environment, he added.
Up to a month ahead of the online trade meeting, Trump was playing down the deal's importance, saying it "means very little" in the current environment in which Washington is ratcheting up conflict with Beijing on a series of fronts.
Analysts said that Trump's words before the online meeting show he cares about the trade talks, and he needs the phase one deal. And the trade talks are one card he has been unwilling to throw down in his reelection campaign.
"Much of what President Trump says these days has more to do with the upcoming election than anything else, and the message he is sending is primarily to the voters and he obviously is of the opinion that taking a tough stand on China will benefit him in the elections," William Jones, Washington bureau chief of executive intelligence review magazine, told the Global Times on Friday.
There are no doubt people in the Trump administration who don't want a complete "decoupling" between China and the US. And they may want to keep this deal alive to prevent that from happening, Jones added.