Geneva: China has decided to offer tens of billions of dollars of market access to the US by importing liquefied natural gas, crude oil, refined oil, beef, soybeans, cotton, civilian aircraft, integrated circuits, machine tools, and Hollywood movies, in addition to sending thousands of students and tourists to America.
As part of a bonanza for the Trump administration, China wants specific improvements in the imposition of trade remedy measures such as anti-dumping and countervailing duties on Chinese goods, lifting of export-control measures for high-technology products for civilian use, and fair treatment of Chinese investors, including its state-owned enterprises, in mergers and acquisitions in the American market.
At a time when President Donald Trump is ratcheting up pressure on the European Union because of the bulging trade surpluses accruing to Germany on account of its soaring exports of cars and other products to the US market, and economic and trade tensions between New Delhi and Beijing are rising, China’s decision to strike a grand bilateral bargain with Washington is of considerable significance, according to trade analysts.
Recently, India boycotted China’s grand launching of the $900 billion “One Belt One Road" (OBOR) initiative, while Germany expressed sharp concerns about lack of transparency and little access for its companies in the OBOR.
In a 117-page report unveiled by the Chinese ministry of commerce on 24 May, and reviewed by Mint, Beijing maintained that China-US relations, after 45 years of accelerated liberalization, must become “mature, broad-minded, visionary and wise" so as to bring about “win-win cooperation". It dismissed concerns about its continued surplus with the US, suggesting actual trade gap between the two countries would be around $164.8 billion after taking into consideration the US’s surplus in services and the deficit in goods in two-way trade. “Over the past decade, the US trade deficit with China was gradually decreased," it maintained.
The average growth rate of US exports to China was nearly three times the growth rate of overall US exports over the past decade, and twice the growth rate of China’s exports to the US, argued China. “The US has maintained long-term surplus in trade in services and in 2016, the US exported to China 51 movies, obtaining revenue of US$16 billion. Chinese tourists and students in the US spent more than US$51 billion."
The US must settle for a harmonious trade and economic relationship, argued China. “The US side should also abandon the Cold War mentality, relax control on its exports to China, and create opportunities to expand export of high-tech products to China," it said.
Against the backdrop of concerns about Chinese surpluses, China said it would “further increase imports of agricultural products such as soybeans and cotton from the US and speed up negotiations with the US on terms regarding traceability and inspection and quarantine for US beef to enter China, which will benefit 6 million American farmers".
As regards imports of manufactured goods from the US, China said it would increase purchase of “advanced manufactured goods such as aircraft, integrated circuits and machine tools".
China said the US must treat imports of Chinese goods without using the price of alternative state system to calculate the dumping margin on Chinese products during anti-dumping investigations. “The abandonment of the alternative state approach in the anti-dumping investigation against China under Article 15 (of China’s accession protocol) is unconditional," said China.
Effectively, the US must not insist on conditions such as “the priority application of domestic laws, China’s excess capacity, (and) market economy status" for fulfilling the World Trade Organization (WTO) commitments. It called on the US to review its trade remedy measures on Chinese products involving 153 duty orders (110 anti-dumping and 43 countervailing duty orders).
China wants the US to lift the existing export-control restrictions for selling high-tech products for civilian purposes to China. “China hopes that the US side will take practicable action in easing the export control against China and effectively loosen the restrictions on products exported to civilian users for civil purposes" for reducing the US trade deficit.
China emphasized the importance of WTO in addressing global trade and investment problems, suggesting that if “members cast away the WTO rules in bilateral trade talks, the global economy may be led into the danger of ‘beggar-thy-neighbor’ and ‘zero-sum-game’."