Beijing, May 3: Top Chinese and American officials today kicked off their two-day crucial talks in Beijing to avert a trade war following US President Donald Trump’s demand that China should immediately cut its trade surplus with the United States by USD 100 billion.
A US delegation-led by Treasury Secretary Steven Mnuchin, who is also President Trump’s special envoy, held talks with a Chinese team headed by Vice-Premier Liu He, a close confidant of President Xi Jinping and also a member of the powerful Politburo of the ruling Communist Party of China (CPC).
The US delegation also includes Commerce Secretary Wilbur Ross, US Trade Representative Robert Lighthizer, assistant to the president for economic policy Larry Kudlow and assistant to the president for trade and manufacturing policy Peter Navarro.
Confirming that the talks between the two sides have started, Chinese Foreign Ministry spokesperson Hua Chunying said China welcomes the US delegation headed by Trump’s special envoy.
The negotiations have begun and still underway, she said.
Talks were regarded key to avert a trade war between the two major trade partners as both sides have already announced increase in tariffs in a tit-for-tat trade spat.
The trade dispute between the top two economies of the world began last month with Trump imposing tariffs on steel and aluminium imports into the US.
China retaliated by imposing additional tariffs worth about USD three billion on 128 US products.
Trump, while demanding China to reduce the USD 375 billion by USD 100 billion, retaliated with USD 50 billion tariffs on Chinese products.
In retaliation, China announced plans to impose new tariffs of 25 per cent worth USD 50 billion on 106 American products including items like soybeans which could hurt American farmers.
The two countries have not yet implemented their tariff increases to reach a negotiated settlement.
Asked about China’s expectations from the talks, Hua said that it is in the best interests of the two countries to resolve their disputes.
“As the world’s top two economies, the US and China should properly resolve relevant disputes through equal-footed consultation and maintain the long-term stability of China-US economic and trade ties,” she said.
In light of the economic volumes of the two countries and the complexity of bilateral ties, it is never very practical to imagine all problems being wiped out through one-time consultation, she said.
“However, as long as the US is sincere about maintaining the long-term stability of China-US economic and trade ties and comes to the negotiating table with mutual respect, equal-footed consultation and win-win results in mind, then we believe that the bilateral consultation would be constructive,” she said.
China’s trade surplus with the US last year rose to a record high. While China put the total at USD 275.8 billion, US figures said it is USD 100 billion more.
Tackling the trade gap between the US and China was one of President Trump’s election campaign promises.
A China Daily report yesterday quoted a US-China Business Council (USCBC) report as saying that exports from the US to China grew faster last year than US export growth to the rest of the world.
The US exported nearly USD 128 billion worth of goods to China in 2017, more than ever before and making China the third-largest US goods export market, the USCBC’s 2018 annual report said.
This is after US goods exports to China had declined in 2015 and 2016.
Chinese experts remain “cautiously optimistic” about the trade talks.
Chen Wenling, chief economist at the China Centre for International Economic Exchanges, said the topics under discussion at the talks surely will not be limited to trade because the US also wants to promote its “America First” strategy by containing China’s ability to attract foreign direct investment.
“The US also is deeply concerned about China’s industrial upgrades, technology transfers, currency rate, talent flows and intellectual property protection. It also wants to relieve the downward pressure on its stock market,” she told the daily.
Zhang Monan, a researcher at the China Centre for International Economic Exchanges, said the co-dependency of China and the US is a highly reactive relationship.
“When one country changes the terms of the engagement, the other, feeling scorned, usually responds in kind,” Zhang said.
