MAJOR BOOST: The deals are the first results of trade talks that began last month
WASHINGTON/BEIJING: The United States and China have agreed to take action by mid-July to increase access for US financial firms and expand trade in beef and chicken among other steps as part of Washington’s drive to cut its trade deficit with Beijing.
The deals are the first results of 100 days of trade talks that began last month, when a meeting between US President Donald Trump and Chinese President Xi Jinping proved far more friendly than had been expected after last year’s US presidential campaign, but the immediate impact was unclear.
“This will help us to bring down the deficit for sure,” US Commerce Secretary Wilbur Ross said at media briefing in Washington. “You watch and you’ll see.”
The United States ran a trade deficit of $347 billion with China last year, US Treasury figures show. By July 16, the 100th day after the leaders’ meeting, China agreed to issue guidelines that would allow US-owned card payment services “to begin the licensing process” in a sector where China’s UnionPay system has had a near monopoly.
China will also allow US imports of beef no later than July 16, and the United States will issue a proposed rule to allow Chinese cooked poultry to enter US markets.
Foreign-owned firms will also be able to provide credit rating services in China. “We believe that Sino-US economic cooperation is the trend of the times… We will continue to move forward,” Chinese Vice Finance Minister Zhu Guangyao told a Beijing media briefing.
Trump had pledged during his presidential campaign that he would stop trade practices by China and other countries that he deemed unfair to the United States. His tough talk towards Beijing had fuelled early fears of a trade war.
But Trump’s rhetoric towards China has softened in the past month, expressing admiration for Xi and saying he wanted Beijing to help deal with the North Korean nuclear threat.
Shortly after their meeting, Trump said he had told Xi that China would get a better trade deal if it worked to rein in North Korea. China is neighbouring North Korea’s lone major ally.
On Friday, when asked whether the trade talks with the United States were related to North Korea, Zhu said economic issues should not be politicised.
But while the world’s two biggest economies agreed to take a number of steps by July 16, it was not clear how much these new deals would increase trade in the near term.
Ker Gibbs, the chairman of the American Chamber of Commerce in Shanghai, said the measures were a good beginning but not a breakthrough.
“Past foot-dragging means we won’t celebrate until these promises are executed,” Gibbs said, calling the opening in the electronic payments market “mainly symbolic”.
“This should have been done years ago when it would have made a difference. At this point, the domestic players are well entrenched so foreign companies will have a hard time entering the China market.” — Reuters