The China Center for International Economic Exchanges (referred to as CCIEE hereafter) and the U.S. Chamber of Commerce (referred to as USCC hereafter) co-hosted the 10th U.S.-China CEO and Former Senior Officials’ Dialogue from May 15 to 16, 2018 in Beijing. The 10th Dialogue session occurred amidst escalating bilateral trade and investment frictions as well as the recent exchange of frameworks for reducing such frictions. Against such a backdrop, CCIEE and USCC convened leading executives and former government officials, and held candid and in-depth exchanges with the goal of jointly advocating for the shared goal of promoting the sustained and healthy development of China-U.S. economic and commercial ties.
CCIEE and USCC reaffirmed the importance of the Dialogue as the foremost platform for exchanges between Chinese and U.S. business leaders. The participants in the Dialogue stressed that economic and commercial ties remain the anchor of China-U.S. relations, and are of special importance for the stability, growth and prosperity of each economy and the world economy. Both sides expressed concern about the risk of a downward spiral in bilateral economic relations that could result in severe damage to growth and employment in each country, and which could spread to infect the global economy.
The two sides held an open, vigorous discussion of priority concerns on both sides, including of widening differences between the U.S. and Chinese economic models and systemic issues, asymmetries in access to trade and investment markets, structural differences and the role of export controls as a contributor to trade deficits, the implications of unilateral actions to address concerns, and the costs and consequences of increasing balkanization of advanced technology markets.
The two sides applaud efforts by the two governments to re-engage in dialogue and negotiations to constructively address and manage concerns. They agreed that clear and regular communications channels are essential for resolving challenges. There was also agreement on both sides that a long-term framework for U.S.-China economic and commercial relations, whether a bilateral investment treaty, a free trade agreement, or another structure, would be highly beneficial and more work needs to be done on both sides to realize a new and sustainable framework for relations . There was a consensus that the Track II process could contribute to management of bilateral frictions through development of a practical work program of activities that can promote better mutual understanding and practical win-win outcomes.
The two sides call on their governments to act urgently to reduce trade and investment barriers and promote real progress in bilateral economic cooperation. Both sides agreed that the business communities of the two countries need to advocate before their governments with greater urgency to take a comprehensive view of the importance of bilateral trade and investment, further strengthen and expand economic cooperation and openness, enhance economic policy coordination and information-sharing, reduce obstacles and restrictions to bilateral trade and investment, and jointly explore new areas of cooperation to create mutually beneficial opportunities.
CCIEE and USCC call upon the leaders of the two countries to embrace openness in their domestic economies, oppose protectionism and provide stronger support for free and fair trade and investment facilitation globally.
The two sides also held detailed breakout sessions on critical issues and opportunities in the China-U.S. economic and commercial relations, and specifically the Belt and Road Initiative and the digital economy. In response to the input of the participants on both sides, CCIEE and the Chamber agreed to pursue the following cooperative activities in 2018 and into 2019.
I. Advancing Global Trade Facilitation and Maintaining the Multilateral Trading System
A. Maintaining the Multilateral Trading System
Since the WTO’s establishment in 1995, it has served as the primary venue for multilateral trade negotiations, and the central mechanism for enforcing global trade rules and resolving trade disputes.
Yet the WTO is under increasing strain. Some countries are expressing concerns regarding perceived excessive use of trade remedies in the global trading system. Other countries are voicing concerns about the WTO’s inability to effectively curb state involvement in shaping the terms of trade as well as exceptions that allow governments to advance policies that distort trade and competition.
CCIEE and USCC will convene a seminar to discuss the future of the multilateral trading system with attention to the above issues. The seminar will bring together Chinese and U.S. experts to discuss opportunities for joint work to strengthen the multilateral trading system, and expand and sustain its prominence and effectiveness globally. The conference will also explore how China and the United States can work together to ensure that the WTO remains an effective venue for resolving international trade disputes.
B. Global Trade Facilitation
E-commerce presents unprecedented opportunities to increase trade between the U.S. and China, especially among small- to medium-size businesses. Both China and the United States have globally competitive e-commerce companies that would benefit from greater facilitation of e-commerce. The implementation of the WTO Trade Facilitation Agreement presents an opportunity to strengthen U.S.-China discussions on trade facilitation best practices, with special emphasis on simplified clearance of low-value shipments.
CCIEE and USCC will convene a conference of leading Chinese and U.S. e-commerce-related companies, along with relevant government representatives, to discuss best practices for trade facilitation for the digital economy. Discussions will highlight the role that technology and data can play in facilitating and securing cross-border e-commerce, including the role of single window clearance systems and simplified clearance of low-value shipments.
II. Exploring Investment Cooperation under the Framework of “Belt and Road” Initiative and Through Other Means
Investment remains an important driver of China-U.S. trade relations and growth of the two economies. There is great potential for the two sides to further expand mutual investment. China’s Belt and Road Initiative (BRI), which has spurred investment in infrastructure building, has the potential to broaden the space for Chinese and U.S. investment cooperation in third countries. Significant participation by U.S. companies, including in partnership with Chinese companies, can make new contributions to the furtherance of U.S.-China economic and trade relations. In certain areas, U.S. companies can offer the world’s best technology and management capability, thereby helping to ensure smooth and efficient completion of BRI projects.
Infrastructure building in the U.S. will generate an enormous need for investment, and the new U.S. Administration has indicated that this is a major priority. China has strong capabilities and cost advantages in infrastructure building. Chinese companies and financial institutions are ready to contribute to this effort through financing and provision of goods and services.
Both sides agreed that the two countries can engage in full cooperation under the BRI and through a number of other means, including the AIIB, World Bank and other multilateral investment and financing institutions.
Prior to the next Dialogue meeting, CCIEE and USCC will launch parallel, but coordinated efforts to interview U.S. and Chinese CEOs regarding potential channels to enhance U.S.-Chinese corporate and financial collaboration under the BRI. Both sides will publish the results of their interviews in a report for dissemination to U.S. and Chinese policymakers, businesses, and academic thought leaders containing recommendations for advancing BRI-focused advocacy and engagement.
Within the next 12 months, CCIEE and USCC will organize a seminar on BRI in the United States, which will allow the Chinese side to brief the U.S. side on the BRI progress, including initiative content, current progress and projects that might be appropriate for U.S. company participation, including in partnership with Chinese companies. The U.S. side will brief the Chinese side on the latest infrastructure developments in the United States and share reflections on pathways for Chinese companies to participate in U.S. infrastructure revitalization initiatives.
III. Sharing Best Practices in the Digital Economy and Cross-Border Data Flows
Participants on both sides agreed on the need to continue joint efforts to promote policy coordination on regulation of cross-border data flows. Given the attention the protection of cyber security and privacy has received, both sides agreed on the need to expand cooperation to promote increased openness to cross-border data flows.
Based on the success of the first seminar held in November 2017 in Beijing, CCIEE and USCC will organize a second seminar in the United States over the coming 12 months that will promote expanded sharing of best practices in the area of the digital economy and cross-border data flows. The seminar will invite company and industry experts as well as representatives from relevant regulatory authorities.