With no date fixed for China-US trade talks and increasingly tense relations between the two countries, Beijing has turned its attention inwards to tend to its own economy while still fulfilling its obligations to the phase one trade deal signed in January.
The two sides had reportedly been due to hold the first review of their phase one trade deal on Saturday but it never happened, with US President Donald Trump saying he postponed the talks because he was unhappy with Beijing.
Trump made the comments in Arizona on Tuesday night and also said Beijing’s handling of the Covid-19 pandemic was “unthinkable”.
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August 15 had been expected as the review date because the two nations – with China represented by Vice-Premier Liu He and Washington by US Trade Representative Robert Lighthizer – agreed to make a semi-annual review when they reached the phase one trade deal in January.
But Liu is now in the central province of Anhui, accompanying President Xi Jinping in inspecting the reconstruction of flood-stricken counties as China’s leadership turns introspective to shore up the domestic economy, a sign suggesting the conversation may not happen any time soon.
Observers said that with the coronavirus pandemic, China had focused more on boosting its hard-hit economy. Beijing still preferred to maintain economic ties with Washington by buying US products, but engaging in talks would not lead to a breakthrough in expanding cooperation.
“The sentiment is poor on both sides to discuss the possibility of expanding cooperation,” said Lu Xiang, a research fellow with the Chinese Academy of Social Sciences.
He noted the reluctance by the US administration to pull out of the hard-gained deal after nearly two years of negotiations and said Trump was facing a big challenge to salvage the US economy from recession.
“Trade is not a priority in bilateral relationships any more. The trade deal would only score limited points for his election campaign,” Lu said.
White House Chief of Staff Mark Meadows said the review had not been rescheduled, but that Lighthizer remained in regular contact with his counterparts in China about fulfilling its commitments.
“There are no rescheduled talks … at this point,” Meadows said. “Ambassador Lighthizer continues to have discussions with his Chinese counterparts involving purchases and fulfilling their agreements.”
A US source familiar with the talks said a date was never confirmed. Chinese foreign ministry spokesman Zhao Lijian did not respond to Trump’s remarks about trade talk postponement but he did defend China’s measures in containing the epidemic.
China promised to buy more American goods as part of the phase one deal, including US$77 billion worth this year, with a goal of raising the value of purchases by US$200 billion compared with 2017 levels.
Beijing has fallen behind the first-year commitment because of the coronavirus pandemic and inflamed tensions with Washington.
But senior Chinese officials repeatedly said Beijing was committed to honouring the deal despite facing rising tensions with the US over issues such as Hong Kong, the South China Sea, Taiwan and Xinjiang.
US official data and industrial data show that China has increased its purchases of agricultural and energy products in recent months.
Chen Fengying, a senior fellow at the China Institutes of Contemporary International Relations, said both sides certainly needed dialogue but she doubted there would be any consensus.
She said China would continue buying to meet domestic demand but deep-rooted differences between the two systems were hard to narrow, as the US had politicised everything ahead of the November election.
“Meeting all changes with constancy may be the best strategy. We can have a review or even talks three months later when the US presidential election is finished and the pandemic is better addressed,” Chen said.
Huo Jianguo, former head of the Ministry of Commerce’s research institute, said China should try to fulfil the trade deal promises, and in the meantime actively seek dialogue with the US government to prevent further escalation of tension.
“The US seems to continue pressuring China for votes … I’m worried that such China-bashing moves could get crazier ahead of the presidential election,” Huo said.
“The key is to manage disputes and the sources of risks.”
More from South China Morning Post:
- Trump says China buying more US goods ‘to keep me happy’
- Countdown to US-China trade talks, but little hope of bigger breakthrough
- Trump administration ‘satisfied’ with China purchase progress in phase one trade deal, says White House adviser Larry Kudlow
- US-China trade war: Beijing will honour phase one deal by opening financial sector wider, its central bank chief says
This article US-China trade: Beijing focuses on its own economy as half-year review of phase one deal is postponed first appeared on South China Morning Post