Driving commercial and political engagement between Asia, the Middle East and Europe
Driving commercial and political engagement between Asia, the Middle East and Europe
Driving commercial and political engagement between Asia, the Middle East and Europe
China has offered to cut its trade surplus with the US by up to $200bn a year, Reuters reports, in what could be a major concession to President Trump.
The offer was made during a surprise meeting between President Trump and Chinese Vice Premier Liu He on Thursday, The South China Morning Post reports. The Chinese official is in Washington for the latest trade talks, which continue today.
According to an unnamed US official, China proposed a package that would see it buy more from the US and make new trade concessions, which would have the effect of cutting America’s trade deficit with Beijing – a key point of contention for President Trump – by $200bn per year.
If realised, this would represent a key concession to US demands to rebalance its trade with China.
However, such a move would have a significant impact on the Chinese economy, with Bloomberg reporting that ‘China would suffer pressure on GDP growth as a result and would need to boost domestic demand and debt in the economy through monetary easing and allowing more credit.’
Chinese state media outlet Xinhua cited Liu He as saying that ‘China is willing to work with the United States to appropriately handle and settle economic and trade issues of mutual concern on the basis of equality and mutual benefit, in a bid to make sure that the bilateral economic and trade cooperation remains to serve as the ballast and propeller of bilateral ties.’
Xinhua also cites President Trump as stating ‘the two nations should prioritise trade and investment cooperation in such areas as energy and manufacturing, expand agricultural product trade and market access, and deepen bilateral cooperation on intellectual property rights.’
The finer details of what the package constitutes were not revealed, nor was the US response to the offer, but it seems this second round of talks is proving more fruitful than the initial dialogue in Beijing earlier this month.
With talks continuing today, it is likely we will see more movement as the two sides seek to avert a damaging trade war.
The Chinese Ambassador to the UK, His Excellency Liu Xiaoming, will be speaking at Asia House on the prospect of a US-China trade war on 21 May. Details here.
