US-China rivalry: trade talks key to getting relations back on track, insiders say

Wendy Wu
·3-min read

Trade and industry groups could provide the catalyst for repairing China-US relations, insiders said on Thursday, as the world continues to wait for the result of the US presidential election.

“Essentially between the US and China, it’s really only the trade negotiation groups that have any frequent effective communication,” Greg Gilligan, chairman of the American Chamber of Commerce in China, said in an interview.

Since an interim, phase one, deal to resolve the trade war was signed in January, the countries’ trade negotiation teams – led by Vice-Premier Liu He on the Chinese side, and Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on the US side – had been in regular contact and treated their negotiations “very seriously and diligently”, Gilligan said.

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“They are in conversation every few weeks or each month,” he said.

Whoever was in the White House come 2021, the talks would continue, although if Joe Biden were to win there was the possibility the two sides might also resume their stalled talks on establishing a bilateral investment, he said.

Shi Yinhong, a Chinese government adviser and professor of international relations at Renmin University of China, said Beijing was expected to seek a resumption of high-level talks with Washington if Biden became president.

“Such conversations would take place sooner or later, but there is a long way to go to achieve a substantial de-escalation of tensions,” he said.

Shi said a discussion of trade issues could be a starting point, with Beijing perhaps trying to renegotiate the phase one deal in its favour.

Vice-Premier Liu He is flanked by US Trade Representative Robert Lighthizer (left) and US Treasury Secretary Steven Mnuchin. Photo: Reuters
Vice-Premier Liu He is flanked by US Trade Representative Robert Lighthizer (left) and US Treasury Secretary Steven Mnuchin. Photo: Reuters

In recent months, relations between China and the US have plunged to their lowest point for decades. Despite the promise of a resolution to the trade war brought by the interim agreement, tensions between the world’s two largest economies have soared on everything from the situation in Hong Kong and tensions over Taiwan and the South China Sea, to technology, human rights and the coronavirus pandemic.

Taiwanese president denies devising strategy for US relations if Biden wins

Even if Biden does win the election, Washington’s China policy is unlikely to change significantly, which means challenges are set to remain for some time.

But for Gilligan, the phase one deal could be a starting point, as long as it is “presented in a way that each side can accept and claim victory … then move forward to negotiating other matters”, such as subsidies for China’s state-owned firms, intellectual property protection, technology transfers and market access.

“Those are going to be the tougher issues to negotiate, but we will only have the chances to negotiate them if and when we can see the phase one is on track and successful,” he said.

If Biden won, “I’d say chances of the BIT [bilateral investment treaty] being revived is certainly possible”, he said.

During the Barack Obama administration, China and the US negotiated a comprehensive two-way investment treaty, but the talks ended after Donald Trump took over in the White House.

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