China: Waiting for Washington to Negotiate

Published on April 12, 2018

In the wake of a strong, even aggressive, push on trade, the Trump Administration has grasped the proverbial olive branch that was cautiously extended last weekend by China’s President Xi Jinping at the Boao Forum in Hainan. But despite rumors to the contrary, there have been no negotiations on any substantive level between the US and China on trade – yet.

There will be, but as to the current state of play:

*Xi studiously and deliberately did not mention “Trump” or the “United States” or “trade war” in his keynote address at Boao, or for that matter, in any of his discussions with foreign dignitaries on the sidelines of the forum. But Xi’s speech was, “to some extent,” of course clearly directed at Trump and the US administration, note senior Chinese sources (see SGH 4/2/18, “China: Beijing Responds to Washington”).

*China’s “People’s Daily” immediately published an editorial highlighting the speech, but emphasizing nevertheless that while “the world will no doubt benefit from China’s new era of openness … the new measures will not apply to those countries that violate the WTO and frequently launch trade wars against other countries.” For all that, Washington for its part has forcefully made the case that it is not the United States that stands in violation of WTO or trade principles.

*As to specific measures, Chinese officials are now keen to emphasize that pledges by Xi to significantly broaden market access, strengthen the protection of intellectual property rights (IPRs), and expand imports have been in the works for a long time – in other words – are not to be confused for concessions offered the US under any pressure.

*Specifically, they note, Beijing announced plans to open up the financial sector on November 10, 2017; Premier Li Keqiang announced plans to lower tariffs on cars and certain commodity imports in his government work report on March 5 of this year; and Xi, along with the rest of China’s leadership, have “repeatedly emphasized” the importance of strengthening the protection of IPRs since the 18th CPC National Congress in 2012.

For what it’s worth, all that is to emphasize on a political level that Beijing’s position on the current US-China trade dispute has not changed, and senior officials maintain they will not initiate calls to discuss trade to Treasury Secretary Steven Mnuchin, US Trade Representative Robert Lighthizer, or Commerce Secretary Wilbur Ross. But, neither will they refuse a phone call or message.

The ball, they say, is now in the US court.

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