The 13th round of trade negotiations between China and the United States ended in Washington, DC on October 11. According to the official announcements of China and the United States and the detailed quotations published by the White House, the two countries have now reached the first phase agreement in a few weeks, so that the two The plan signed by the heads of state during the APEC summit in November to advance the next phase of trade negotiations.
The United States has always advocated the signing of a “comprehensive agreement.” However, with the introduction of tariffs, companies in both countries continued to bear the cost of tariffs. China suspended the ordering of agricultural products from the United States. Donald Trump also gradually changed its attitude and repeatedly conveyed “even more tendencies.” In the context of a comprehensive agreement, it does not preclude the conclusion of a preliminary agreement. At the same time, the contents of the open negotiations between the two countries, the United States before the “China abandoned industrial policy” and other claims are not included, the US’s most concerned “implementation mechanism” has also been changed to “dispute resolution mechanism.”
From the softening of attitudes, the lack of key claims, to the changes in wording, the White House has a willingness to compromise – and Beijing has also squatted downhill, providing Trump with the “delivery” step.
“Small agreement” reached a China-US temporary tariff war within a few weeks
Trump met with Chinese Vice Premier Liu He at the Oval Office of the White House on October 11. Compared with the Chinese manuscript and Trump’s statement, China and the United States have basically reached the first phase of the agreement, involving agriculture, technology transfer and intellectual property. As for finance, US Finance Minister Steven Mnuchin said that China and the United States have extensive discussions on financial services. The US has asked China to open its market to US financial services companies, and the two sides are close to reaching an agreement on these issues. It refers to the agreement between China and the United States on the transparency of the foreign exchange market and the free market.
In response to the tariff issue of concern to all parties, the United States originally scheduled to impose tariffs on Chinese goods valued at about US$250 billion on October 15 from the current 25% to 30%. Mnuchin said that Trump has decided to suspend the addition of this part of the tariff. And for the plan that will take effect on December 15th, involving a $300 billion tariff on Chinese goods from 10% to 15%, Wright Heze said that Trump has not yet made a final decision and there is still much time to consider. .
Trump specifically said that these consensus will be on paper and it takes three to five weeks to write the text. “You know, we will meet in Chile (APEC summit will be held in Chile on November 16th), maybe it will be completed by then. (the first phase of the agreement), or about that time (signing the agreement).
Beijing is actively paving the way
Comparing the past attitudes of the two countries, the United States did not emphasize the “enforcement mechanism” that was mentioned repeatedly during the negotiations. It was only under the reporter’s question that Trump said, “We have problems with the implementation. “The plan”, and Wright Heze said “We will conduct a detailed dialogue and discussion”, “both parties agree to establish a viable dispute resolution mechanism. We are very close to this goal.” Previously, there was no relevant discussion on the differences in industrial policies such as “Made in China 2025”.
The Chinese side also immediately gave a positive response to the US’s moderate attitude. The official manuscript of the Ministry of Commerce of China shows that “the two sides have made substantial progress in the fields of agriculture, intellectual property protection, exchange rates, financial services, expanding trade cooperation, technology transfer, dispute settlement, etc.” The primary position of the US trade negotiations.
According to Trump, China has promised to increase the amount of agricultural products purchased from the United States, eventually increasing to a scale of 40 to 50 billion US dollars per year. The finance ministers Mnuchin and Trump further clarified that they will increase to the procurement level of the year in the second year, that is, in 2020. Liu He also added in a timely manner that China has ordered 20 million tons of US soybeans in recent weeks.
In recent months, China-US agricultural trade has been seriously affected by trade disputes between the two countries. On the one hand, US agriculture is under tremendous pressure. On the other hand, Chinese pork prices are also high because of the high prices of plague and soybean meal. . Today, China has promised to purchase large quantities of agricultural products. According to Trump, it has risen from the highest level in the past 16 billion to 40 billion to 50 billion US dollars. It is said that after the United States slowed down the negotiation attitude and made appropriate compromises, Actively providing Trump with an opportunity to “go down the steps” shows enough sincerity.
The “Preliminary Agreement” is already a long-awaited trade war.
After the “Shanghai talks” between China and the United States at the end of July this year, “Hong Kong 01” has written many times, prejudged that China and the United States have reached a consensus since then and no longer seek a “comprehensive agreement” in the near-term negotiation process. Negotiations must also begin with the conclusion of a “small agreement”. The current situation has indeed developed in accordance with this situation. China and the United States have shown some sincerity in the 13th round of negotiations just concluded.
However, this does not mean the suspension of the trade war. Next, the best situation is that the two countries are adapting to each other in the meeting again and again on the basis of the continued increase in existing tariffs.
In the final analysis, the reason why the two countries seek to reach a “small agreement” or “preliminary agreement” is because there are important differences that are difficult to resolve. Apart from the apparent demands of the so-called “forced technology transfer”, “implementation mechanism” and “industrial policy”, the more fundamental reason lies in the structural challenges brought about by the combination of China-US comprehensive strength.
Whether it is economic volume, industrial strength, cutting-edge technology research and development, scientific research investment, military strength and disposable financial resources, today’s China is not comparable to the Soviet Union or Japan. In August 2019, Dr. Kiron Skinner, who retired as director of policy planning for the US State Department, said at a State Council meeting in May of the same year that “the United States has never pursued strategic competition with its opponents that requires such huge resources.”
Skinner also said, “No one expected that China would become our global economic and ideological competitor decades ago. It is equally shocking that we are facing a strong non-white rival for the first time.” It is said that apart from economic and military science and technology, the differences between China and the United States in the fields of politics, social governance, and especially ideology are the root causes of the structural challenges of the two countries.
It can be said that the United States is the most successful country developed on the basis of recognizing human nature. The British Puritanism from the 18th century laid the foundation of American Christian culture, and the political culture formed by the pursuit of humanity and Christian faith made the United States With the cohesiveness of a huge country, this cohesiveness transcends the old-fashioned national cohesion with the nation as the link.
Looking at China again, despite the constant change of the dynasty, it is the world’s oldest civilization, establishing a centralized administrative system and a bureaucratic administrative culture. Unlike the United States, where the state is the collection of individuals, China’s national concept is an indispensable part of society. It is based on the concept of individual and family, and personal interests need to be subordinated to national interests.
With the rise of China’s economy, China is not seeking to replace the United States, nor is it financial control, but hopes to continue to improve the people’s livelihood and civil rights and improve the country’s political system. While continuing to connect with developed countries and complement each other, the other side uses Chinese technology. Chinese industrial enterprises and China Finance have released the labor force of developing countries, and the 2 billion people have been included in the Chinese economic circle to provide assistance to these countries. I also look for new sources of resources for myself, including the most scarce economic elements of the 21st century: the ability to read the instructions, work on time, and have the basic industrial skills.
This kind of practice in China will be of great help to the world, but it will also allow China to further move to the center of the world. Many Americans do not want to see China stand out from this globalization and become the country that dominates the world. However, the globalization presided over by the United States and the West is dwarfed, creating a series of uneven distribution and unpredictable industrial development, which cannot adapt to the needs of the present and the future. As for the United States to coerce countries not to use Huawei on the issue of 5G construction, the result is also conceivable. From Italy to France to Germany to the Netherlands, the allies have rejected the US request.
This is not surprising. Trying to use your influence to prevent competitors from doing something, but not providing alternatives, is not necessarily successful. So what about the United States?
Advice to the United States: Ironing still needs its own hard
In the short term, Trump can upgrade the current trade and science and technology wars with China, and even spread to various fields such as finance and politics, and use all available “tools”, including Hong Kong issues, the Taiwan Strait issue, etc., and finally reach Let the CCP give in to the effect. Of course, doing so will not only cause certain damage to the world economy today, but also may damage the Trump 2020 election, and there is no guarantee that it will work. After all, China has been preparing for such confrontation for the past 10 years. In the current situation, the Chinese expression of “playing, always being accompanied” has sufficient enthusiasm.
Since this road does not work, what can the United States do? The remaining choices are to seek a temporary truce, invest in long-term confrontation, and in the process restore the long-term policies that have established the glory of the United States.
Perhaps the United States should promote key high-tech industries, especially semiconductor manufacturing, to return to the United States;
Perhaps the United States should focus its defense research on advanced science and technology rather than on the past technology and equipment. The United States needs not the aircraft carrier and the F-35 stealth aircraft, but the drone group;
Perhaps the United States should promote new defense education legislation, just as Eisenhower has invested in a whole generation of engineers after the launch of the first satellite in the Soviet Union, and increased investment in basic research;
Perhaps the United States should adopt an open attitude in the field of scientific research, provide convenient immigration and employment policies, attract a large number of outstanding Chinese scientific and technological talents, and compete for talents;
Perhaps the United States should provide a concrete alternative to the so-called “Indian Strategy” and replace it with the EU, Japan, South Korea, Australia and India.
When confronted with the bottleneck of development, the Chinese government would rather risk the risk of more social instability, take the world’s governors as big and unyielding, and promote “de-capacity, destocking, deleveraging, cost reduction, and supplementation during the economic downturn. The short-board economic restructuring is only to better cope with the next stage of development challenges. On the other hand, when the White House faces domestic economic problems such as hollowing out of its economic industry and uneven distribution, it blames the international community for using tariffs, sanctions, or pressure on allies to cooperate. These are all Nowhere. If the United States wants to maintain its absolute lead in comprehensive national strength, it must be rooted in its own development.
After all, playing iron still needs to be hard.