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China, US agree to keep talking after failing to make a breakthrough in first round
The highly anticipated China-US trade talks in Beijing closed without any written agreements, joint communique, or press meeting while an anticipated meeting between the US delegation and China's President Xi Jinping also did not happen. Instead, the US delegation, constituted mainly of China hawks, just headed back home in gloomy silence after the two-day negotiation.

Scant information about the talks was released to the public, in contrast to its high significance as it was the first meeting of top officials on both sides after weeks of rhetoric about new tariffs on each other's goods. On Friday morning, when US Treasury Secretary Steven Mnuchin left his hotel, heading for a meeting, he told reporters they were “having good conversations on trade disputes with China,” while White House economic advisor Peter Navarro refused to give any details.

At half past five in the afternoon of Friday, China's official Xinhua agency reported about the negotiation, describing it to be “frank, efficient and constructive,” while acknowledging “major differences remain”. It's notable that Chinese media have mostly presented the talks in a positive light, emphasizing the two economies have reached consensus on some issues and they agreed to construct a working mechanism to keep in close contact.

Global Times, representing the optimistic view this time, published an editorial on Thursday, contending that China-US trade disputes are now on the track of dialogue. “Despite the differences, the trade frictions have been successfully led in the right direction of being resolved by negotiation and coordination,” the editorial wrote.

Different from China's seemingly cheerful attitude, Western media mostly made unfavorable comments about the talks. The Wall Street Journal pointed out the two sides had made little headway in their negotiations. They just exchanged lists of demands and ended up with not even a joint statement, the report noted.

Also, although China's state-run Xinhua emphasized the two parties agreed to keep on talking about key issues, it admitted there was no specific timetable set for the next round of talks. If the two sides fail to keep on talking at critical moments, the trade frictions may escalate.

Interestingly, after the official report by Xinhua, two documents have gone viral on Chinese social media platforms without being censored—one is titled “Balancing China-US Trade Relationship” believed to be drafted by the Chinese government, while the other is a framework of demands from the American side.

Cheng Tan, an independent media commentator, said the US demands are like a direct frontal attack with “solid and cut-throat” movement, while China's document is more like practicing Tai Chi, intending to fight back the frontal assault with effortless and smart maneuvers.

But there is one thing that is common—each party tried to put the blame on the other. The US claimed all they want is fair trade, but not trade protectionism and it would not be their fault if the trade war really broke. For China, given the US demands are akin to bullying, they would rather have the bilateral trade ties cut off than back down.

According to Financial Times, the US demands were transferred to the Chinese before the talks started, which required China to cut down the trade deficit by $200 billion before the end of 2020, reduce tariffs on US goods and suspend subsidies for advanced manufacturing industries. The US-China trade imbalance reached $337 billion last year, according to the US data. The demand of $200 billion is double what US President Trump had suggested in April.

“This is like a lion opening its big mouth,” Yu Miaojie, vice dean of the National School of Development of Peking University, told the Guardian, suggesting that the negotiation is not going in the right direction, with escalated trade frictions looming. “In negotiations, both parties would provide a list of demands, so they could seek common ground while agreeing to disagree,” he said, “If the other party is making unreasonable requests, the Chinese government would refuse to accept.”

Right before the Beijing talks, Xinhua published an article saying China is opening its door further to the world, allowing bigger access to the Chinese markets. At the Annual Boao Forum for Asia, according to the report, President Xi announced unprecedented policies, committing to stepping up the opening-up. “Trade war will let the US lose its opportunity to grab a big share of the huge China market's 'cake',” Xinhua warned.

“China is ready to talk about ways to cut down trade deficit by either increasing imports from the US or decreasing its exports to the US. However, if the US aims to contain China's development by pointing fingers at the country's industrial polices like Made in China 2025, there is no basis for reaching any agreement. Chinese people would not accept such kind of arrangements even if the government agreed,” Zhao Xijun, vice dean of the School of Finance of Renmin University of China, was quoted by the media as saying.

The outcome of the talks were not entirely surprising to either side. Before the US delegation arrived, China's Ministry of Foreign Affairs said, “One round of talks would not resolve the disputes.” Wilbur Ross, the US commerce secretary, told CNBC before his Beijing visit this is not merely trade talks. The US wants to see if China will give what they want and then decide if the 301 investigation and 232 measures will be used. So, the trip will decide which method the US would use for solving the problems.  

 


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