Recently, Chinese President Xi Jinping and his US counterpart Donald Trump reached an important consensus on stabilizing bilateral trade relations in Buenos Aires, which can be seen as a successful example of Chinese and American leaders solve major economic and trade issues at a critical moment with political wisdom and pragmatic spirit.
One crucial implication of the consensus is that both China and the United States recognize that it is completely normal for the two sides to have differences in the economic and trade field. The key is to properly manage and control the differences according to the principles of mutual respect, equality and mutual benefit, and find a solution which is acceptable to both sides. The two countries should maintain close contacts through various means and jointly develop the Sino-US relations. In the report released by Xinhua News Agency, more positive words are being used than before, such as “positive”, “active”, “close”, “promote” and “maintain.” The leaders of China and the United States stepped on the brakes for the trade war in time and laid the foundation for the next consultation, with a view to bringing the bilateral economic and trade relations back to normal as soon as possible.
Some entrepreneurs and experts believe that the Sino-US trade war will vanish and they can relax for a while. In my opinion, they are too optimistic about the Sino-US trade war.
China and the United States agreed to stop imposing new tariffs and the economic and trade teams of the two countries will follow the instructions of their leaders to facilitate consultations and try to reach an agreement. However, this can only be seen as a truce, or the escalation of the trade war has been temporarily stopped, but the trade war is not over yet.
The major issue is how will the Chinese and American economic and trade teams negotiate? The most optimistic result is that the two sides will reach an agreement in the next 90 days, truly ending the trade war. According to past experience in dealing with the United States, however, this is quite difficult and the negotiation will be full of uncertainties.
The Chinese side is fully aware of the complexity, arduousness and long-term nature of the Sino-US economic and trade competition. We do not expect to solve all the problems in the next 90 days, but it is crucial that the two sides can sit down and talk so as to avoid any further escalation. China’s negotiating team will stick to the bottom line as it did in the past, accept no unreasonable demands, while remaining flexible in dealing with specific differences.
The atmosphere and results of the meetings between the two leaders are better than expected. There may be some unexpected things which may not be optimistic, but no matter what, China will deal with them appropriately. More importantly, China must continue to work on the following three aspects, regardless of the development of the trade war.
First of all, this year marks the 40th anniversary of China’s reform and opening up, which is a critical moment for China to increase its opening up. We should implement the measures proposed by President Xi Jinping at the Boao Forum for Asia, the sooner the better.
Secondly, we should enhance intellectual property protection, speed up the legislation of intellectual property, increase the punishment of infringement of intellectual property rights, and lower the threshold for violation of intellectual property rights. We have to do this not because of the trade wars, but the need to strengthen independent innovation.
Last but not least, we have to create a high-quality development with a higher level of opening up, promote better integration of the Chinese and American economies, increase the volume of the Sino-US economies and trade, and make the United States realize that China’s development can also bring benefits to the United States.