BEIJING: Chinese Commerce Minister Wang Wentao met with US Commerce Secretary Gina Raimondo on Monday, the second day of the US commerce chief’s four-day high-stake trip to China.
The meeting was convened as the world’s two biggest economies aim to stabilize bilateral economic and trade ties amid growing tensions, with mechanisms to address disputes in focus.
While details about the meeting remain sketchy from the Chinese side, both sides have struck a positive tone over the closely watched talks. According to a US official statement released on Monday night, both sides agreed to set up four mechanisms to address trade and investment issues and enhance communication on other specific issues.
The agreements on setting up a new commercial issues working group and launching the export control enforcement information exchange, among others, suggested that both sides are taking necessary measures to enhance talks to address disputes; however, concrete actions by Washington to address China’s core concerns over crackdown measures are needed for a stable bilateral economic and trade relationship, experts said.
Even though major differences between the two countries will remain, efforts to stabilize bilateral economic and trade ties and enhance cooperation in areas of common interests could help the US tackle its own economic challenges, including high inflation and lingering recessionary pressure, as the Chinese economy remains resilient thanks to a series of measures to stabilize growth, experts noted.
Wang met with Raimondo on Monday morning, China Media Group reported. Video footage of the two commerce chiefs, who were both smiling and appeared to be in a positive mood, accompanied by other officials, walking into a meeting room, was broadcast by several news outlets. However, there were no official statements released about the talks as of press time on Monday night.
According to several US media outlets, the two officials stressed the importance of maintaining a stable relationship. Raimondo said that “it is profoundly important that we have a stable economic relationship, which is to the benefit of both of our countries. And in fact what the world expects of us,” CNN reported on Monday. Wang also said bilateral economic ties were important not just to the two countries but also the rest of the world, according to CNN.
In a statement on Monday night, the US Commerce Department said the Chinese and US commerce chiefs agreed to establish a new commercial issues working group, a consultation mechanism to seek solutions on trade and investment issues and to advance US commercial interests in China, with the first meeting scheduled for early 2024.
They also agreed to launch the export control enforcement information exchange, with the first meeting scheduled for Tuesday, convene subject matter experts from both sides to hold technical discussions on strengthening the protection of trade secrets and confidential business information, and communicate regularly at the ministerial level and meet in-person at least once each year.
Bai Ming, deputy director of the international market research institute at the Chinese Academy of International Trade and Economic Cooperation, said the four mechanisms are mostly procedural items for enhancing communication on the issues, which are necessary but concrete actions from the US are crucial for a stable China-US economic and trade relationship.
“The hope is that the US side will actually show real sincerity and address these issues, because just having more talks on the issues is far from enough,” Bai told the Global Times on Monday.
Raimondo’s remarks about commitment to promoting trade with China reflect her hope for the trip to enhance communication and stabilize China-US economic and trade relations, and address specific issues that hinder development of bilateral economic and trade ties, said Wu Xinbo, director of the Center for American Studies at Fudan University.
Underscoring her intention to promote certain trade, Raimondo, at an event on Monday, showcased some US personal care products and insisted that 99 percent of trade between China and the US is unrelated to the US’ export controls and trade of products without “national security implications” can flourish, Reuters reported on Monday.
“The plan, and the hope, is that our commercial relationship, if done right, can stabilize the political relationship,” Reuters quoted Raimondo as saying.
The US commerce secretary’s showcase of US personal care products also comes as Chinese consumers are increasingly resistant toward Japanese cosmetic products over Japan’s plan to dump nuclear-contaminated wastewater into the sea.
Another focus of the talks during Raimondo’s four-day visit in China is efforts by the two sides to address specific economic and trade disputes. During the meeting with the Chinese Commerce Minister on Monday, Raimondo noted that officials from the two countries had worked to set up “new information exchanges and working groups” for more engagement, CNN reported.
Chinese experts also suggested that some types of mechanisms might be established in an effort to address certain issues. Gao Lingyun, a trade expert at the Chinese Academy of Social Sciences in Beijing, said that there are normal communication mechanisms between the two countries and in fact there are also such mechanisms under the phrase one trade agreement.
With regard to new reported working mechanisms, they could be between lower-level departments and bureaus under the commerce ministries, according to Gao. For example, such working mechanism could be set up between the Bureau of Industry and Security under the US Commerce Department and relevant departments of the Chinese Commerce Ministry to “communicate about the US’ so-called ‘entity list’ and other restrictions,” Gao told the Global Times on Monday.
Wu also said that during Raimondo’ trip, the two sides might establish relevant mechanisms to “handle specific issues such as tariffs and the US’ export restrictions targeting China.”
Still, Chinese experts cautioned against having too much expectations from the US. While the US appears increasingly intent on stabilizing economic and trade ties with China, economic and trade issues will serve the US’ overall strategy toward China, under which Washington focuses mainly on restrictions, while developing ties with China comes in second, Wu said. “Thus, they are selectively promoting improvement and development of China-US economic and trade relations. We cannot have too much expectations for the US.”
Highlighting such a strategy, Raimondo, even as she sought to promote trade between the two countries, said during the meeting on Monday that “in matters of national security, there is no room to compromise or negotiate,” according to the Financial Times.
However, even as all countries, including China, understandably take various measures to protect their own national security, the US overstretching the concept of “national security” could be the root cause of profound differences, Chinese experts said. Chinese officials have also repeatedly criticized the US for using an overstretched concept of national security to crack down on China.
“If the concept of ‘national security’ referred to by the US is reasonable, we agree with it and there is a lot of room for bilateral cooperation; however, if the US considers China’s chip industry and sovereignty and rights in the South China Sea as impacting US’ ‘national security,’ then we have a big dispute,” Gao said.
Li Yong, a senior research fellow at the China Association of International Trade, also told the Global Times on Monday that Raimondo needs to offer “a clearer and groundbreaking interpretation of ‘healthy competition,'” so as to send a more sincere message of cooperation.
The US and the world need cooperation instead of decoupling between the world’s two biggest economies, especially amid growing downward pressure, experts said.
US officials’ intensifying efforts to stabilize economic and trade ties with China comes as the US economy faces a series of challenges, including persistently high inflation and lingering recessionary risks. Recently, US Fed officials warned of “significant” risks to inflation, which potentially requires more rate hikes, which in turn measures greater pressure on not just the US economy but also the global economy as a whole.
Tian Yun, a Beijing-based economist, said even though the US still seeks to contain China, US officials are also fully aware that they need China to help boost the US’ domestic economy, which is crucial for US officials ahead of elections next year.
“They need better economic figures, and for that, they need to stabilize ties with China, in terms of economy and trade,” Tian told the Global Times, while noting that the Chinese economy, while facing challenges, is resilient and an irreplaceable partner for the US.
Some foreign media outlets have been hyping grim outlooks for the Chinese economy amid some challenges, but Chinese policymakers have moved swiftly to tackle various challenges in areas such as the private economy, consumption and the capital market to boost growth, which is expected to be the fastest among major economies. According to the IMF, China’ s economy is expected to grow by 5.2 percent in 2023, while the US GDP is projected to grow by 1.8 percent this year.
Raimondo also highlighted the importance of the bilateral economic relationship, which she said is “one of the most significant in the world,” on Monday. “We share over $700 billion of trade,” she said, according to CNN.
Cooperation between China and the US, which is expected to contribute to more than 50 percent of global growth, is also great news for the global economy amid the current downturn, experts said.
