China still hopeful of phase one trade deal with US

Shanghai’s financial district: China is hoping more trade talks can take place before the Thanksgiving holiday. (AFP)
Updated 22 November 2019

China still hopeful of phase one trade deal with US

  • American legislation over Hong Kong could pose new barrier to progress

BEIJING: China will strive to reach an initial trade agreement with the United States as both sides keep communication channels open, the Chinese commerce ministry said on Thursday, in an attempt to allay fears talks might be unraveling.

China is willing to work with the US to resolve each other’s core concerns on the basis of equality and mutual respect, and will try hard to reach a “phase one” deal, Gao Feng, spokesman at the ministry, told reporters.

“This is in line with the interests of both China and the United States, and of the world,” Gao said.

Economists warn that the prolonged trade dispute between China and the United States is escalating risks to the global economy by disrupting supply chains, discouraging investment and dampening business confidence.

Completion of a phase one deal could slide into next year, trade experts and people close to the White House told Reuters previously, as Beijing presses for more extensive tariff rollbacks and the US administration counters with heightened demands of its own.

China has invited top US trade negotiators for a new round of talks in Beijing, the Wall Street Journal reported on Thursday, adding Beijing hopes the round of talks can take place before next Thursday’s Thanksgiving holiday in the United States.

US officials have indicated they would be willing to meet but have not committed to a date, the report said, and they would be reluctant to travel for the talks unless China makes it clear it would make commitments on intellectual property protection, forced technology transfers and agricultural purchases.

Global equities retreated on Thursday due to concerns that the phase one deal would be delayed. The trade jitters sent the 10-year US Treasury yield down to near its lowest levels in three weeks. The Chinese yuan also softened against the dollar.

Officials from Beijing had suggested that Chinese President Xi Jinping and US counterpart Donald Trump might sign a deal in early December.

Some experts said the next date to watch was Dec. 15, when US tariffs on about $156 billion in Chinese goods are to take effect, including gift items such as electronics and Christmas decorations.

In a speech on Wednesday in Beijing, Chinese Vice Premier Liu He said he was “cautiously optimistic” on a phase one deal, Bloomberg News said, citing people present ahead of a forum organized by Bloomberg LP.

Liu, China’s chief negotiator at the trade talks, told one of the attendees that he was “confused” about the US demands, but was confident the first phase of a deal could be completed nevertheless.

Gao, when asked about sticking points and whether they were related to Washington’s demand for China to buy more US farm goods and the tariff rollbacks, said he did not have more information to disclose beyond the fact that both parties would continue to communicate, and “outside rumors are not accurate.”

A former Chinese commerce minister told Reuters that both sides should return to the time when the trade war first started.

“We should return to the point of origin and cancel all tariffs,” Wei Jianguo said on the sidelines of the Bloomberg forum.

Wei said he was hopeful for a phase one pact, in light of the pressure on both the US and Chinese economies as the trade war dragged on.

“Trump himself is cognizant about the needs of the (upcoming US) elections, and the US economy has also suffered great losses,” he said. “Under such circumstances, it is entirely possible to reach a phased agreement.”

A fresh row between Washington and Beijing over US legislation on Hong Kong has also threatened to undermine talks and delay a phase one deal that investors had initially hoped to be signed by now.

The US House of Representatives on Wednesday passed two bills to back protesters in Hong Kong and send a warning to China about human rights, with Trump expected to sign them into law.

The measure would require the State Department to certify at least once a year that Hong Kong retains enough autonomy to qualify for the special US trading consideration that helped it become a world financial center.

“We urge the US side to cease this activity, stop before it’s too late and take action to prevent these measures from becoming law,  and stop meddling in Hong Kong’s affairs and China’s affairs,” said Geng Shuang, spokesman at the Chinese foreign ministry.

Trump has 10 days to sign a bill passed by Congress, or use his veto.

On Thursday, the ruling Chinese Communist Party’s main newspaper, the People’s Daily, urged the US to “rein in the horse at the edge of the precipice” and stop interfering in Hong Kong matters and China’s internal affairs.

 


Saudi Arabia’s 6-point plan to jumpstart global economy

Updated 07 July 2020

Saudi Arabia’s 6-point plan to jumpstart global economy

  • Policy recommendations to G20 aim to counter effects of pandemic

DUBAI: Saudi Arabia, in its capacity as president of the G20 group of nations, has unveiled a six-point business plan to jump start the global economy out of the recession brought on by the COVID-19 pandemic.

Yousef Al-Benyan, the chairman of the B20 business group within the G20, told a webinar from Riyadh that the response to the pandemic -— including the injection of $5 trillion into the global economy — had been “reassuring.”

But he warned that the leading economies of the world had to continue to work together to mitigate the effects of global lockdowns and to address the possibility of a “second wave” of the disease.

“Cooperation and collaboration between governments, global governance institutions and businesses is vital for an effective and timely resolution of this multi-dimensional contagion transcending borders,” Al-Benyan said.

“The B20 is strongly of the view there is no alternative to global cooperation, collaboration and consensus to tide over a multi-dimensional and systemic crisis,” he added.

The six-point plan, contained in a special report to the G20 leadership with input from 750 global business leaders, sets out a series of policy recommendations to counter the effects of the disease which threaten to spark the deepest economic recession in nearly a century.

The document advocates policies to build health resilience, safeguard human capital, and prevent financial instability.

It also promotes measures to free up global supply chains, revive productive economic sectors, and digitize the world economy “responsibly and inclusively.”

In a media question-and-answer session to launch the report, Al-Benyan said that among the top priorities for business leaders were the search for a vaccine against the virus that has killed more than half-a-million people around the world, and the need to reopen global trade routes slammed shut by economic lockdowns.

He said that the G20 response had been speedy and proactive, especially in comparison with the global financial crisis of 2009, but he said that more needed to be done, especially to face the possibility that the disease might surge again. “Now is not the time to celebrate,” he warned.

“Multilateral institutions and mechanisms must be positively leveraged by governments to serve their societies and must be enhanced wherever necessary during and after the pandemic,” he said, highlighting the role of the World Health Organization, the UN and the International Monetary Fund, which have come under attack from some world leaders during the pandemic.

Al-Benyan said that policy responses to the pandemic had been “designed according to each country’s requirements.”

Separately, the governor of the Saudi Arabian Monetary Authority said that it was “too early” to say if the Kingdom’s economy would experience a sharp “V-shape” recovery from pandemic recession.