The Ministry of Commerce disclosed the full Research Report on China-US Economic and Trade Relations (hereinafter referred to as Report) on its official website on May 25. Besides foreword and conclusion, the Report describes the China-US economic and trade relations in four aspects, including the historical background of China-US economic and trade relations, the mutually beneficial nature of China-US economic and trade relations, major concerns about China-US economic and trade relations and promoting the development of China-US economic and trade cooperation.
In terms of major concerns about China-US economic and trade relations, the Report reveals 9 concerns, including 5 concerns of the US (namely, US trade deficit with China, RMB exchange rate, excess capacity, market access and protection of intellectual property rights) and 4 concerns of China (namely, fulfillment of the obligations under Article 15 of China’s protocol on the accession of the WTO, US export control against China, fair treatment of Chinese enterprises investing in the US and abuse of trade remedy measures of the US). It is the first time that China officially releases research report on China-US economic and trade relations and discloses 9 major disputes in China-US economic and trade relations.
“Although there are other questions, these 9 problems are the most important, which also exist for a long time.” Several things need understanding, said Zhang Yuyan, director of the Chinese Academy of Social Sciences institute of world economics and politics. Firstly, all problems can be solved as whether both parties can come to agreement depends on their actions and policy adjustment. Secondly, it will take a long time to tackle the long standing issues because they won’t disappear all of a sudden. Thirdly, solving problems doesn’t mean they vanish completely but means they are controlled at a certain range. It cannot be said that two countries under normal relations cannot have problems, but they can peacefully and jointly figure out solutions to the problems. If problems cannot be solved temporarily, they should consider the overall situation, control these problems and take time to tackle them gradually.
“As both China and the US are such big economics, it is impossible that there is not any problem between them. Instead, it is normal with problems and disagreement,” said Zhang.
Among the 5 concerns of the US, Zhang believes that the two countries are most likely to come to agreement on RMB exchange rate and protection of intellectual property rights. Greater progress is expected to achieve in promoting trade balance (US trade deficit with China) within this year.
“10 ‘early harvests’ have been achieved in the 100-day action plan of China and US and more results will be made in the medium- and final-term, which will facilitate China-US trade balance. It is a huge progress if 5 percent-10 percent of trade deficits are reduced in one year.” It is a little difficult to truly settle all of the problems. It will be relatively hard to solve the problem of excess capacity, which is more complex, but it is just a matter of time.
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As for the 4 concerns of China, the problem about Chinese-funded enterprises investing in the US may be easily solved. Zhang remarked that one of the reasons is that negotiation on BIT is always being promoted. Another reason is the US also needs growth in investment, employment and economy fields. So it will be relatively easier to relax restrictions over investment. It is still quite difficult to settle other problems. “Competition in some fields among China and the US, the two largest economics in the world, is rather fierce.”
In the view of Zhang, China officially releases the research report on China-US economic and trade relations for the first time. It is of great significance to boost understanding, settle disagreements and facilitate sound mutual exchanges between the two countries.
Translated by Vanessa Chen
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