Trade experts in China and the United States have called on the new administration in Washington to rebuild bilateral ties to prevent a further decoupling of the world’s two largest economies.
Ahead of Joe Biden’s inauguration as US president on Wednesday, business leaders and economists are hoping for a less antagonistic approach towards China, a policy reset, and for some of the damage caused by Donald Trump’s trade war to be repaired.
“[Biden’s] policies will be about returning to multilateralism, returning to international organisations, and returning to the status of fighting without splitting,” Chen Wenling, chief economist at the China Centre for International Economic Exchange, a government-backed think tank, told a seminar in Beijing on Tuesday.
Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.
Chen, who is also an economist at the State Council Research Office, which advises on government policy, expected the new US administration to continue its containment policy towards China. But she said an establishment figure like Biden would be more predictable and pragmatic – and ties were likely to improve.
“There will be a partial recovery in Sino-US relations, and cooperation will be possible in areas like energy, the environment, global governance and coordination on international policies,” she said, adding that this would be essential to prevent a complete decoupling of the two economies that could lead to unprecedented conflict.
Separately, an American business group has also called for the Biden administration to rebuild ties with China and said Trump’s trade war had hurt the US economy.
A study commissioned by the US-China Business Council said the trade dispute had caused a peak loss of 245,000 American jobs.
The group, which represents major American businesses operating in China, also warned that a further escalation in tension and decoupling of the two economies could shrink US GDP by US$1.6 trillion over the next five years, citing the findings of Oxford Economics.
That could result in 732,000 fewer US jobs in 2022, and 320,000 fewer in 2025.
“With president-elect Joe Biden taking office mere days after this report’s release, it is imperative to acknowledge the benefits that trade with China has brought – and continues to bring – to the US economy, American global competitiveness, and job creation,” Craig Allen, president of the US-China Business Council, said in the report released last week.
The group called for the Biden administration to roll back tariffs and negotiate arrangements to remove market access barriers in both countries. A gradual scaling back of tariffs to around 12 per cent from the current 19 per cent would produce an additional US$160 billion in GDP and 145,000 new jobs by 2025, the report said.
Biden has said he does not plan to make any immediate changes to the Trump administration’s tariffs but will work with allies to pressure China to change its trade behaviour.
More from South China Morning Post:
This article US-China relations: calls for Biden administration to rebuild ties and reset policy first appeared on South China Morning Post