On July 31, 2019, Zhang Xiaoqiang, Executive Vice Chairman of CCIEE and Director of the Executive Board met with Ms. Deborah Lehr, Vice Chairman and Executive Director of the Paulson Institute. The two sides conducted in-depth exchanges on current China-US economic and trade relations and cooperation between the two institutions. Xu Chaoyou, Director-General of the Department of External Affairs, were also present at the meeting.
Zhang Xiaoqiang said that the China-US relationship is the most important bilateral relationship in the world. The GDP and R&D investment of the two countries account for 40% of the world’s total, and they are the first and second-largest countries in terms of trade in goods and services, accounting for 23% of the world’s total trade. Therefore, the stability of this relationship has an important impact not only on the two countries but also on the whole world. We have always stressed that economic and trade relations are the “ballistic stone” and propeller of the China-US relations, but there have been many problems in the economic and trade fields in the past two years. At the end of March last year, the US started the trade war unilaterally; in May this year, it exerted extreme pressure on China during the 11th round of China-US economic and trade negotiation, causing setbacks for the negotiation. At present, the US is also suppressing China in the areas of technology, industrial enterprises, and even Chinese students studying in the US, apart from trade. In May this year, the US Department of Commerce added Huawei to the “entity list” for export control, and this list is constantly evolving to include more companies and universities. The Chinese government has always stated that it does not want a trade war. At the Osaka Summit in June this year, President Xi Jinping and President Trump agreed to restart economic and trade consultations on the basis of equality and mutual respect, and jointly promote the China-US relations based on coordination, cooperation and stability. On July 30-31, China’s Vice Premier Liu He will lead the Chinese representatives to take part in the 12th round of negotiations in Shanghai with the US Trade Representative Robert Lighthizer, and the US Secretary of State, Steven Mnuchin. We look forward to seeing good results.
Zhang Xiaoqiang emphasized that the China-US trade war has caused damage to both China and the United States. During their visit to CCIEE, John Neuffer, president of the American Semiconductor Industry Association, and a group of American companies mentioned that the US semiconductor industry supplies 50% of its total output to Chinese companies, and so cutting off supply to Huawei has brought significant damage to these US companies. The United States Chamber of Commerce and many American entrepreneurs also believe that high tariffs harm the interests of both China and the United States.
Zhang Xiaoqiang pointed out that the United States wants China to expand its opening up and China has indeed expanded its opening up. The US companies’ investment in China continues to grow, but Chinese companies’ investment in the United States has fallen sharply. According to a report issued by Rhodium Group, the investment of Chinese companies in the United States has dropped from about $45 billion in 2016 to $30 billion in 2017 and then to $5 billion in 2018. This is not because Chinese companies are reluctant to invest in the United States, but the US has implemented protectionism. In the name of “national security”, the US discriminates against Chinese companies’ investment in the United States and does not allow fair competition. The US should correct its wrong practices and make practical changes. China will continue to keep the US updated about its reform process, including state-owned enterprise reform, subsidy policy, circulation service trade, negative list, and financial opening up, so that the United States can better understand China. At the opening ceremony of the 13th Summer Davos Forum, Chinese Premier Li Keqiang announced that the ratio of foreign capital shares of the financial industry will be abolished in 2020, which was originally scheduled for 2021. In terms of market access, China will further open its door to foreign investors. The US and China can complement each other and achieve win-win cooperation in many aspects. In particular, the two countries cannot be decoupled in science and technology because this will harm not just China and the US but also the rest of the world.
Zhang Xiaoqiang also said that as a high-end think tank of China, CCIEE has always attached great importance to cooperation with American think tanks and institutions such as the Paulson Institute and the US Chamber of Commerce to jointly promote the China-US relations. In May of this year, Thomas Donohue, President and CEO of the US Chamber of Commerce led a delegation to visit CCIEE, including Carlos Miguel Gutiérrez, former US Secretary of Commerce, exchanging views on China-US economic and trade issues. In July, CCIEE and the China-US Exchange Foundation, established by Mr. Tung Chee-hwa held the High-end Seminar on China-US Economic and Trade Relations in Hong Kong. Senior officials, experts and CEOs were invited to the seminar, including former US Secretary of Commerce Daley, and former US Ambassador to China, Baucus. The officials of many state governments expressed that they will continue to promote local economic cooperation with China.
Speaking of the “Belt and Road” and WTO reform, Zhang Xiaoqiang emphasized that the “Belt and Road” is an open platform for promoting win-win cooperation. The US government and Congress have doubts about this initiative, but many American companies have expressed their willingness to participate in the building of the “Belt and Road”. Actually, some American companies have already conducted cooperation with Chinese companies under the “Belt and Road”. Compared with the United States, Japanese companies are very active in participating in the building of the “Belt and Road”. In terms of WTO reform, it involves new areas such as cross-border e-commerce and the digital economy. China and the United States are at the forefront in these areas and thus, they should take responsibility to find reasonable cooperation and management structure.
Ms. Deborah Lehr said that China and the United States face many common challenges and they should address them together, which will benefit China, the US and the rest of the world. President Trump attaches great importance to his relationship with President Xi Jinping. The White House also believes that China-US relations must have a new structure rather than a “decoupling.” The WTO reform needs to solve some new problems, such as the status of emerging economies and multilateral negotiations. The current WTO system cannot reflect the current needs and in fact, the China-US trade war is also caused by the failure of the WTO to some extent. It is important for China and the United States to find ways to revitalize the WTO.
The two sides value the cooperative relations between the two institutions greatly and agreed to deepen cooperation continuously and play a better role in the areas of China-US trade, green finance, local cooperation, the building of the “Belt and Road”, and WTO reform.