China-U.S. trade war unlikely to happen despite tensions
Thorny issues like a trade imbalance are expected to be tackled when the first round of the Comprehensive Economic Dialogue (CED) between China and the U.S. takes place on Wednesday in Washington, DC.
The dialogue will inject fresh impetus into Sino-U.S. economic and trade ties and both countries are expected to adopt collaborative and innovative ways to address tough bilateral and global challenges, experts said.
The dialogue comes following Chinese President Xi Jinping's meeting with his U.S. counterpart Donald Trump on July 9 on the sidelines of the G20 summit in Hamburg, Germany, in which they reaffirmed their commitment to healthy and stable economic relations.
The two sides may discuss topics related to bilateral trade and investment, macroeconomic policies as well as global and regional economic issues, experts said.
China and the U.S. have achieved some progress in applying the China-U.S. 100-day action plan under the CED's framework, and the two sides will discuss a one-year cooperation plan at the dialogue, Chinese Ministry of Commerce spokesman Gao Feng told a briefing on Thursday.
The action plan was initiated after the two presidents met at Mar-a-Largo, Florida in April. Agreements on agricultural products, energy, banking and financial services were signed.
For instance, as part of the plan, China lifted a 14-year ban on U.S. beef imports and the U.S. has pledged to issue regulations on China-made poultry exports.
The 100-day action plan has made progress, and is a prelude to a new type of Sino-U.S. economic and trade relationship, said Zhuang Rui, deputy dean of the Institute of International Economics at the Beijing-based University of International Business and Economics.
Trade balance concerns
The U.S. is concerned about its trade deficit with China, and maintaining a trade balance with China is expected to be high on the dialogue's agenda, Zhuang said.
China's trade surplus with the U.S. was .4 billion in June, up from billion in May, its largest since October 2015, according to official data.
To address the trade imbalance, China should further open up its services sector to the U.S., including financial and tourism services, while the U.S. is expected to approve exports of high-tech products to China, experts said.
Although the U.S. has taken a harsh stance on Chinese imports, especially in such items as steel, a trade war between the two countries is unlikely to happen, Gao Liankui, research program director of China and World Economic Governance at the Renmin University of China, told the Global Times on Tuesday.
The dialogue is expected to help the two nations seek a collaborative and innovative way to advance their economic growth as well as to lead the world out of the [economic] crisis, Gao said.
Experts said that a Bilateral Investment Treaty (BIT) will also be discussed at the dialogue. BIT talks began in 2008 as China and the U.S. moved to strengthen bilateral investments.
"The BIT was supposed to have been signed years ago, but after Trump took office, the treaty's prospects looked bleak," Zhuang said.
China and the U.S. should focus more on their common challenges, Gao noted. "The two nations face a serious debt crisis and they need to improve their tax policies."
Manufacturing figures prominently for both countries, Zhuang said.
The growth of the manufacturing sector plays a key role in China's economic transformation and upgrade, while Trump is also seeking to bring manufacturing jobs back to the U.S.
"Striking a balance between their goals should be tackled in the coming years," Zhuang added.
She also said that since this is the first time the two nations are entering comprehensive discussions on economic and trade issues since Trump took office, it will have a big impact on future bilateral economic and trade ties, and on the future of global trade and investment.