Goodwill efforts raise hopes for a deal
Editor's Note: The United States has deferred the planned increase in tariffs on $250 billion of Chinese goods from Oct 1 to Oct 15 and China withdrew the tariffs on pork and soybean imports from the US in response. Many believe these moves will de-escalate tensions. Two experts share their views on the new turn of events in the China-US trade war with China Daily's Liu Jianna. Excerpts follow:
Move encouraging and raises hopes
That both sides have shown their intention to defuse the trade tensions is a relief to not only the two economies but also the world beyond. The US move also shows a subtle change in the attitude of the US leader, who while triggering the trade war against China didn't believe that the US would also have to pay a high price for it.
It seems the US administration has deferred the planned increase of tariffs on Chinese imports because it has realized the trade war is detrimental to US consumers. Which in turn shows the US can still act with discretion. The fact that the US leader stopped the airstrike on Iran adds credence to this belief.
It is hoped the two countries will hold the next round of trade talks based on reason in order to reach a deal, at least an interim deal. Still, the deep-rooted conflicts between the world's two largest economies, especially on China's developing economy status, are likely to continue. The conflicts could even intensify in the long term.
Many say the US is staring at recession. Indeed, the US' more than 100 months of economic growth could come to an end according to the laws of economics. If the White House recognizes this fact, the US administration would more strongly feel the need to strike a deal with China at the trade talks.
Tao Wenzhao, a researcher in US studies at the Chinese Academy of Social Sciences
More goodwill gestures needed
China seems to be less affected than expected by the trade war that it has been dragged into against its will. That is because it boasts a huge domestic market with a complete supply chain, which has ensured its strong and lasting attraction for foreign investment. According to the US-China Business Council, 46 percent of the US enterprises operating in the Chinese market reported a higher profit margin from China than their overall profit margin.
Besides, despite the decline in China's exports to the US, its exports to other economies such as the European Union and the ASEAN member states increased considerably. Thanks to the complete supply chain, foreign enterprises have realized that relocating their production units from China to another country would not be cost-effective.
Apart from the measures to further open up its economy, China has also increased investments abroad; its outbound direct investment was $143 billion in 2018 alone. And China's cooperation with other economies has increased the possibility of the China-EU Investment Agreement being inked next year and negotiations on the Regional Comprehensive Economic Partnership being completed by the end of this year.
Also, the efforts to strengthen intellectual property rights protection and improve the business environment are expected to help consolidate China's partnerships and collaboration with other countries.
On the other hand, 300,000 jobs have been lost in the US and 0.3 percent of its growth shaved off, according to Moody's Analytics report. Therefore, it is likely that the US' economic rebound could take longer without the trade war. And the possibility of its economic boom coming to an end cannot be ruled out.
Both countries want a trade deal. However, only a mutually beneficial deal is acceptable to China. More work needs to be done to reach a deal.
Cui Fan, a professor of world economics at the University of International Business and Economics
The views don't necessarily represent those of China Daily.