China Envoy Seeks to Defuse Tensions With U.S. as a Trade War Brews
READ MORE
Economists fear trade sanctions could prompt retaliation from China, and even tip the world’s two largest economies into a trade war that would harm businesses and consumers in the United States and abroad.
“Certainly, the United States has gotten China’s attention with these threats,” said Susan Shirk, a former diplomat and the chairwoman of the 21st Century China Center at the School of Global Policy and Strategy at the University of California, San Diego. “The question is, what are we going to do with that attention?”
Ms. Shirk said the Trump administration seemed to have little interest in negotiating an outcome that would benefit both sides. If the United States chooses to take a more punitive approach, “then I think we are at the brink of heading for a more Cold War-type relationship,” she added.
Mr. Liu has been dispatched to Washington to evaluate the likelihood of such a clash, as well as to try to defuse tensions. He plans to tell American officials about areas where the Chinese economy will be opening up and push for an official commitment to restore economic meetings between the two countries, which stalled after a falling-out over trade in July.
Mr. Liu was scheduled to meet with a handful of top executives from American companies and organizations on Wednesday, including Jamie Dimon of JPMorgan Chase; Laurence D. Fink of BlackRock; David M. Solomon of Goldman Sachs; Marc Allen of Boeing; Evan Greenberg of Chubb; Henry M. Paulson Jr., the former Treasury secretary; and Thomas J. Donohue of the U.S. Chamber of Commerce.
On Thursday, Mr. Liu and a Chinese delegation will jointly meet with top administration officials including Gary D. Cohn, director of the National Economic Council; Robert E. Lighthizer, the United States trade representative; and Steven Mnuchin, the Treasury secretary, for a “frank exchange of views on the trade and economic relationship,” a White House official said. Mr. Liu will not meet with the president himself.
Mr. Trump’s aides, including Mr. Lighthizer, have discouraged the president from engaging with China. It has been a shift from Mr. Trump’s first months in office, when he warmly received Mr. Xi at Mar-a-Lago and started a new “Comprehensive Economic Dialogue” between the countries that would include 100 days of talks over trade.
Advertisement
Continue reading the main story
But when Commerce Secretary Wilbur Ross presented the results of those talks to the president, Mr. Trump, counseled in part by Mr. Lighthizer, concluded the outcome was a bad deal for the United States, according to people familiar with the matter who were not authorized to speak publicly. One of the breakthroughs from the 100 days of talks, China’s agreement to start receiving shipments of American beef, was first promised to the Bush administration. Another deal, to lift caps on foreign investment in Chinese insurance, banking and securities, had already been pledged to President Barack Obama.
The United States pushed unsuccessfully for much tougher concessions from the Chinese at a meeting between the countries in Washington in July, and the short-lived Comprehensive Economic Dialogue fell apart.
One of Mr. Liu’s tasks during his six-day trip is to revive that dialogue, which the Chinese believe gives them an important channel with Washington. But some of Mr. Trump’s advisers believe the Chinese used these dialogues not for meaningful exchanges, but simply to stall American objectives as China’s economic power grows.
The view underlines a broader shift in the United States strategy toward China from using some carrots to a reliance purely on sticks. Mr. Trump has already jettisoned the primary tool that the Obama administration had been using to encourage China to reform — the Trans-Pacific Partnership. The multicountry deal did not include China, but its members said Beijing would be allowed to join after making significant reforms.
Suspicion of China has only grown in recent months. Mr. Trump’s aides are united around the prospect of trade measures against China, though they differ on how to tailor those measures so as not to hurt American consumers. In addition, lawmakers on both sides of the aisle have introduced legislation that would crack down on Chinese investments in the United States that could pose a security risk.
The Trump administration has introduced tariffs on washing machines and solar cells and modules that are aimed at China, and it is soon expected to announce new restrictions on imported aluminum and steel.
In its 2018 trade policy agenda released Wednesday, the Trump administration criticized China for undermining market competition and distorting markets, behavior it said had left the world poorer overall.
“Countries that refuse to give us reciprocal treatment or who engage in other unfair trading practices will find that we know how to defend our interests,” the report said.
Advertisement
Continue reading the main story
The last few months have been marked by uncertainty, with China experts and Washington trade lawyers expecting tough measures on China to be issued at any time. In return, China has floated retaliation on United States exports of airplanes, sorghum and soybeans.
Economists say China has fulfilled some of the promises it made to open its economy when it joined the World Trade Organization in 2001. But under Mr. Xi’s guidance, the country has slowed and even reversed some reforms that would reduce the government’s control over the market, tracking by the Asia Society Policy Institute and the Rhodium Group shows.
Amid this retrenchment, business leaders, policymakers and academics who have long defended China against more hawkish views are suddenly changing their tune.
“There’s no question that post-financial crisis, China’s policies and practices have made it more difficult for foreign investors in some sectors of the economy to compete on a level playing field,” said Myron Brilliant, executive vice president at the U.S. Chamber of Commerce. “There is a frustration that has been boiling over in recent years that the dialogues have not produced enough tangible results.”
Although he stands firmly behind Mr. Xi, the Harvard-educated Mr. Liu has a history of advocating economic reform and more open markets. Mr. Liu is widely thought to be in line for a promotion as China holds a high-profile gathering of top leaders in the coming weeks, potentially to the position of vice premier or to lead the central bank.
Experts on China said Mr. Liu was a familiar figure in the United States, and well-respected by American officials. They put him in the same category as Wang Qishan, another close adviser to Mr. Xi, who is expected to be named vice president.
“If Wang Qishan and Liu He are special voices in Xi’s ear over the next few years, that’s a good thing for U.S. policy,” said Jeffrey A. Bader, a former top China adviser to President Barack Obama.
Continue reading the main story
Article source: http://rss.cnn.com/~r/rss/edition_entertainment/~3/Jam8CV-qPBs/index.html
Comments
Post a Comment