China faces ‘huge challenge’ in living up to US trade promises as it ‘needs to buy US$300bn worth of goods in next two years’l
China has released fewer details about its trade dealwith the US than the American side – a sign of caution as one government adviser warned it would be a “huge challenge” for Beijing to live up to its commitments.
While the United States has released details such as the value of American products China has agreed to buy, Beijing’s statement focused more on the broad principles of the “phase one” agreement.
Observers said this reflected Beijing’s concern about possible mishaps ahead of a formal signing ceremony – which is expected to take place in January.
Shi Yinhong, a Chinese government adviser and international relations professor at Renmin University, said Beijing appeared less excited than the US even though it had described the agreement as significant.
“For China, committing to and carrying out the phase one agreement is a huge challenge,” Shi said. “China will need to buy something like US$300 billion worth of US products in the next two years and lots more US agricultural goods. Does China need that amount of US soybeans?”
A fact sheet released by Washington on Friday said China and the US had reached agreement on nine areas, ranging from intellectual property protection to dispute resolution.
The agreement, which is 86 pages long, will be signed by US Trade Representative Robert Lighthizer and Chinese Vice-Premier Liu He, next month.
The fact sheet said that under the agreement China would refrain from directing or supporting outbound investments “aimed at acquiring foreign technology pursuant to industrial plans that create distortion”.
These included an agreement by China to buy more from the US over the next two years, raising the value of its total imports by US$200 billion compared with the 2017 figure. It also agreed to continuing increasing the level of imports after 2021.
Purchases of US agricultural goods are expected to rise from US$40 billion to US$50 billion annually over the next two years.
It said the agreement would cover meat, poultry, seafood, rice, dairy, infant formula, horticultural products, animal feed and feed additives, pet food and biotechnology products.
By contrast the Chinese statement stuck to the outlines of the agreement, saying that the two sides had agreed to lower tariffs and had reached agreement in nine areas.
It also said the deal could help China to pursue high-quality economic development, improve its business environment and expand market access for foreign companies.
It also said China would expand imports of high-quality US products based on domestic demand and World Trade Organisation rules, but did not provide specific details.
On Sunday Lighthizer told the CBS programme Face the Nation that Friday was the “most momentous day in trade history ever” because the deal with Beijing coincided with the submission of a free-trade agreement with Canada and Mexico.
But he said: “Ultimately, whether this whole agreement works is going to be determined by who’s making the decisions in China, not in the United States.
“If the hardliners are making the decisions we’re going to get one outcome, if the reformers are making the decisions, which is what we hope, then we’re going to get another outcome.”
He said the agreement would not solve all of the problems between the United States and China, because integrating China’s state-dominated economic system with America’s private-sector led system would take years.
Jia Qingguo, associate dean of international studies at Peking University, said both nations would not be able to resolve all contentious issues quickly.
“It is better to have a deal than no deal.” he said. “Just don’t have much expectation that it will significantly help alleviate tensions.”