The long-awaited meeting between US President Donald Trump and Chinese President Xi Jinping at the G20 summit in Buenos Aires finally came to pass at the weekend, and the foreign ministers of both nations described it as “highly successful”.
Interestingly, Beijing and Washington presented the agreements achieved at the meeting in fairly different ways.
China said the United States has agreed to suspend the plan to introduce additional tariffs, but did not mention that the existing 10 percent tariff on US$200 billion of Chinese goods would remain in place, as specified in the US version.
The US said it would go ahead with its plan to raise the 10 percent tariff to 25 percent should the two parties fail to reach any deal during the 90-day truce. This point, however, is missing in the announcement from the Chinese side.
While China stressed that both sides have agreed to speed up talks to remove all tariffs, the US did not say so in its statement.
The US said both countries would immediately start talks over intellectual property rights protection, non-tariff trade barriers, cyber theft and attack, services and agricultural industries. The announcement from the Chinese side did not mention these details.
Trump told reporters that his Chinese counterpart said he would reconsider China’s prior decision to withhold approval of the merger between American chipmaker Qualcomm and rival NXP. The Chinese side didn’t mention this point.
Also, China claimed that the US would stick to the “One China” policy, which is not mentioned in Washington’s statement.
Economic and trade relations between the US and China are so complex that resolving the issues over one dinner is simply impossible.
The 90-day agreement might already be the best outcome, as it shows both sides are willing to talk.
Still, it appears that tensions and frictions between the world’s two largest economies will remain for quite a while. As such, both sides are unlikely to reach a full consensus and lasting ceasefire within 90 days.
To make the best of the situation, China should use the external pressure from the trade war to push through much-needed economic reforms.
This article appeared in the Hong Kong Economic Journal on Dec 4
Translation by Julie Zhu
[Chinese version 中文版]
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