Around June 22, Beijing time, with the urgency of the G20 summit in Osaka, the outside world once again recalled that on the 18th, Chinese President Xi Jinping was invited to call the US President Trang. Many people still hope that this conference will reach a Sino-US agreement as soon as possible.

But when the outside world peruses the dialogue between the Chinese and American leaders, it is not difficult to find the subtext of this: Donald Trump is eager to throw out the “America-China agreement”, and the Chinese side does not talk about the “Agreement”. Two words. This detail reveals the current state of trade confrontation between China and the United States: When Trump tries to stimulate the market again with the “Sino-US Trade Agreement” at the new G20 summit and tries to turn it into a pre-election performance, Beijing is relatively calm.

Xi Jinping still remembers what Trump said.

Before the G20 summit in Osaka, Chinese President Xi Jinping made an ordinary call with US President Trang on June 18. The global economic people who have suffered from Sino-US trade confrontation have thus foreseen a turning point. The just-opened US stock market Dow Jones, Standard & Poor’s and Nasdaq index rose sharply. When the outside world hopes to be in the “Study Conference” in Osaka, Xi Jinping’s intention to avoid the “China-US agreement” cannot be ignored. After all, Beijing remembers a series of actions by Washington after the 2018 Argentine Chamber of Commerce confirmed the Sino-US trade war temporary truce.

According to the data, China and the United States established a preliminary agreement on December 1, 2018, after the “90-day truce”, including Chinese Vice Premier Liu He, Chinese Vice Minister of Commerce Wang Shouwen, and US Deputy Trade Representative Gerry (Jeffrey) Gerrish, US trade representative Robert Lighthizer, and US Treasury Secretary Steven Mnuchin all swayed in Beijing and Washington in the first half of 2019. Senior officials from the Chinese and American economic circles have even “always on the phone every day and have never interrupted.”

Soon, Sino-US seems to have shown positive feedback since February 2019. After receiving the Liu He at the White House, Trump agreed to delay the imposition of tariffs on China and publicly mentioned the possibility of the “Second Sea Lake Manor Fair”. Since the beginning of March, the Chinese and American “economic and trade teams have been communicating day and night, in the consultation text, continue to fully communicate and negotiate”, and the information on “substantial progress” on important issues has also been seen by the financial circles of the two countries. A little hope.

By the end of April, after the ninth round of high-level economic and trade consultations between China and the United States, the US side immediately talked about the possible “epic” results. The Sino-US trade turmoil has gradually gained the upper hand from the judgment that “the phenomenon has come to an end.”

However, by the early morning of May 10, one month later, as the US suddenly announced that it would impose tariffs on Chinese goods exported to the United States worth US$200 billion, its quota increased from the original 10% to 25%. Observers immersed in the “Chinese-American truce” illusion finally found that the Trump side’s attitude toward Beijing is still unstable. For the Trump camp, which is welcoming the 2020 presidential election, it is even a viable option to create tension and transform it into political achievements with extreme pressure.

With Trump himself announced on June 18th to participate in the 2020 presidential election, and he himself is still talking with Xi Jinping, he specifically stressed that “China hopes to reach a deal, and the United States also hopes to reach a deal.” China will obviously notice his behavior of bundling the Sino-US trade war with the US internal affairs. The Beijing politicians headed by Xi Jinping can also understand Trump’s eagerness to push forward the “Agreement.”

Faced with a protracted war between China and the United States

In addition to the practical experience of Sino-US confrontation in the past six months, Beijing has fully considered the strategy of trade wars since the publication of the White Paper on the Facts and China’s Position on Sino-US Trade Frictions in late September 2018.

The Chinese found that the behavior of the United States during the trade war not only undermined the international economic order, but also harmed the global economic and trade relations including Sino-US economic and trade exchanges, which in turn impacted the global value chain and the international division of labor system, and also triggered international finance and bulk. Commodity markets have violently oscillated and become the biggest uncertainties and sources of risk for the global economic recovery.

Faced with this kind of actual threat, Beijing certainly looks forward to resolving differences in a way that both sides can accept. However, negotiations must be based on mutual respect, mutual equality, and faithfulness, words and deeds, and cannot be carried out under the threat of good tariffs, or at the expense of China’s right to development. At this point, China will naturally not accept the “agreement” from Washington.

Many political and financial circles in Beijing have gradually felt the rhythm of Sino-US confrontation. For example, at the “China-US High-end Seminar on Economic and Trade Relations” held in Beijing in late May, many people, including Dai Xianglong, former president of the People’s Bank of China, and Wei Jianguo, former deputy minister of the Ministry of Commerce, believed that “China-US trade friction is a long-term problem”. Many participants therefore also privately reserved reservations about the possible Sino-US summit dialogue during the G20 summit in Osaka.

After all, in China’s adherence to the principle of “equality of consultation, cooperation and win-win”, the United States has adhered to the “first US” principle. At the time of bullying, China and the United States are undoubtedly difficult to unify on issues of understanding. Under this premise, the agreement reached with the United States is not conducive to China’s long-term interests.

Earlier, Chinese Vice Premier Liu He had pointed out that although the Chinese economy had bottomed out in 2018, it is now “into a rising period.” In the field of China’s industrial supply-side reform, the “comprehensive improvement” of the competitiveness of the industry, the competitiveness of products, and the competitiveness of enterprises is also evident. There are no more cards to play in the hands of the United States, and China and the United States will still return to the negotiations. China will not react violently because of the US’s every move. Sino-US trade friction will not seriously affect China’s development.

In this way, when Xi Jinping responded to Trump by “talking” and “exchange of opinions” on the phone, and further confirming the premise of “equality dialogue” between the two countries, Beijing also used this to further demonstrate itself. A prudent stance on the Trump routine.

The Chinese move is understandable. In terms of the short-term situation, the United States suddenly threatened to impose tariffs in early May, thereby undermining the “China-US trade war temporary truce agreement” established by China and the United States during the G20 summit in Argentina in December 2018. The United States even used media tools to release such signals as “China’s rebellion” during this period.

From the perspective of long-term observation, Beijing has gradually established its understanding since the publication of the White Paper on the Facts of China-US Economic and Trade Frictions and China’s Position. Many political and economic analysts in Beijing have also drawn a “tug of war” between China and the United States. Qualitative conclusions such as normalization. After US Commerce Secretary Wilbur Ross released the signal that “China and the United States will have no agreement and Trump will continue to increase taxes” on June 17, Beijing will always clear itself when facing Trump’s routine. 

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