'Understanding deficit' biggest risk

With the world talking about the impact of, and solutions to, a possible trade war between China and the US, a senior Chinese diplomat cautioned that an "understanding deficit" is greater risk for the two countries than their trade deficit.

Cui Tiankai, China's top envoy to Washington, has on many occasions said that the large trade deficit between the world's top two economies is owing to many factors, including the US' economic structure, low savings rate and high-tech export restrictions.

Delivering a speech at Harvard University's Fairbank Center for Chinese Studies on April 17, Cui said that although some people want to make the trade deficit a big issue, the "understanding deficit" is more significant, more difficult to balance and "may have negative impact that lasts longer if we don't make our best efforts to reduce it".