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Sino-US trade relationship to see big changes as Chinese imports surge: former official
Photos: Sino-US.com
 
China will gain a two-digit growth in imports the year ahead, a former Chinese trade official said recently at a think tank event, calling on the US government to drop its “cold war mentality” and grasp the opportunities that would come along.

With China having concluded its 19th Party Congress and the US President Donald Trump set to visit Beijing soon, pit.ifeng.com, a think tank platform of Phoenix New Media, held a seminar Tuesday on Sino-US economic cooperation, at which Wei Jianguo, former vice minister of commerce, predicted there will be significant changes in the largest and most important bilateral economic and trade relations in the world.

Wei indicated that after the 19th Party Congress, China will push for an overall opening up through speeding up the construction of free trade zones and opening up financial and tax services market. And the bilateral economic and trade cooperation between China and the US would be of higher quality while expanding into more areas.

“The country will go beyond farm produce like soybean, oat, beef, and pork, and begin to focus more on sophisticated products in fields like bioscience, new materials, and medicines. Meanwhile, in a bid to meet the diversified needs of China's ever-expanding middle class, there will be more and more imports in services from the US, including banking, finance, elderly care, and healthcare.”

Wei believed that due to “some domestic elements”, the US has a “cold war mentality” toward the rise of China and has made “erroneous judgements”. He called on the US government, businessmen, and academicians to cast away the outdated views and grasp the opportunities brought by an increase in Chinese imports in the next five years.

It is generally believed that though Trump has adopted a protectionist stance, he is proactive in terms of the US-China economic cooperation, as proved by the implementation of the 100-Day Plan and One-year Plan. And the four high-level dialogue mechanisms set up this April when the two leaders met at Mar-a-Lago have especially laid a solid foundation for the bilateral relations.

There are still problems to be solved. The Trump administration's tough trade stance against China has taken shape while demanding a solution to the huge US trade deficit with China. Under the circumstances, the US began the 301 Section Investigation against China in mid-August, ordering a probe into the country's intellectual property practices.

The US-China disputes over IP infringement and counterfeiting began to emerge since the 1990s. In 2010, the Obama administration initiated the 301 Section Investigation against 154 Chinese green energy companies in industries including wind power, solar power, high-efficiency solar cells and new energy vehicles.

According to Wei, it is not fair to say that China has been neglecting the problem. China has long been known as a big manufacturing power, while it is gradually transforming into more sophisticated and advanced new energy and technological fields, for which, the necessity to protect IP rights has become urgent. He said the country's “mass entrepreneurship and innovation” initiative advocated by the government is also pushing itself to double efforts in remedying the problem.
 

Evan Greenberg, chairman of the U.S.-China Business Council and CEO of the Zurich-based insurance company Chubb Limited, addressed the seminar, noting the “trade deficit in his judgement has become a marker the Trump administration is very focused on”, although he doesn't perceive it as a precondition for fair and open trade. “Because so many products come to China as part of the global supply chain. They're manufactured in other countries and they come to China where they're assembled and then exported to the US,” he elaborated, noting if calculated in more proper ways, the current US trade deficit with China would decrease by at least a half.

Greenberg believed that each country has to “run its own races” and the US now confronts a number of issues like it is to improve infrastructure and do deregulation. “You have to make yourself as competitive as possible in your country first.” He said differences in economic systems also would lead to contradictions. “The US has a market-oriented economy, while in China, it is more directed by industrial policies. There are many state-owned enterprises while the state sectors are very important in many industries,” he said, suggesting to find greater mutual benefits through dialogue. In his view, the Bilateral Investment Treaty (BIT) is to create greater certainty and lead to greater investment.

Greenberg asserted that the US is supportive of China's modernization as it was in the interest of both countries. “As the US helps China to develop, the US benefits. China's opening and reform since the beginning 40 years ago is unprecedented. Hundreds of millions have been lifted out of poverty. The country is becoming powerful and enormously more prosperous. At the same time, it is creating enormous opportunities for foreigners, including US exporters and investors.”

“We gain greater access to a market of over one billion consumers as the cost of living in the US comes down. From the other side of the coin, China benefits tremendously from the US investment, good expertise and access to the US consumers. No two nations in the world will have a greater economic impact on each other's future. The ability of both nations to create good jobs, prosperity and stability among other things is tied to our ability to actively invest in and trade with each other,” he said.

Wei predicted that in this or next year, the US will surpass the European Union to become China's top trade partner in the world. “I believe China's smart grid, high-speed rail, infrastructure will get to enter the American market with Trump's visit to Beijing, while advanced US technologies, equipment and key components will be brought to China.”

There are widespread concerns that China's central government has gone back on its “go global” policies and adopted measures to curtail outbound investments. Wei dismissed such conjectures as “nonsense”. “(The government) hopes to see more manufacturing-type enterprises to go out, so more Chinese companies would do outbound investment next year,” he said, noting there is long-term expectations for the “go global” initiative, and the bilateral economic cooperation would divert from trade to investment.

Greenberg revealed that since the conclusion of the 100 Day Plan, there is not much follow-up activity, while the One Year Plan has not yet been implemented. “This is not good news for both American and Chinese businesses. Only in a business environment of more certainty, there are good opportunities,” he said, hoping the Trump visit leads to the result that's now urgently needed. 

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