China-US ties: phase one trade deal must be separate from other parts of relationship to succeed, Beijing says

Chinese state media says new trade talks with US were constructive but this is just the first round and many challenges remain
US secretary of state tells Republican Convention he applauded Trump for ending a ‘ridiculously unfair trade arrangement’

Donald Trump

Kinling Loin Beijing

Published: 5:16pm, 26 Aug 2020

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The implementation of the phase one China-US trade deal needs a better political atmosphere and to be separated from other aspects of the volatile relationship between the two countries, Chinese state media said, despite “constructive” trade talks on Tuesday.

Taoran Notes, which is affiliated with the official Economic Daily newspaper used by Beijing to signal trade talk developments and manage expectations, published an article under the title “China-US talks were smooth and harmonious” on Wednesday.

Despite the positive headline – which toes the official government line about the phone call between Chinese Vice-Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Tuesday – it cautioned that the deal was “just the first round” of a much bigger “game” and highlighted underlying challenges.

Taoran Notes said that even though the call was “constructive”, Beijing would like to see “favourable conditions” improved for the phase one trade deal to be implemented.

“Although the coronavirus pandemic has brought challenges to the implementation of the trade deal, it was not the biggest challenge we face,” the article said.

It noted that the challenges included the need for both sides of the deal to take part, and urged “involved parties” not to leave responsibility with just one side.

In addition, “implementation of the trade deal should not be linked to other issues”, the article said.

Last week, US President Donald Trump said he had called off a trade talk with China scheduled for last weekend and called Beijing’s handling of the coronavirus “unthinkable”.

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China and the US reached the phase one trade agreement on January 15. China promised to buy more American goods as part of the phase one deal, including US$77 billion worth this year, with a goal of raising the value of purchases by US$200 billion compared with 2017 levels.

Beijing has fallen behind its first-year commitment, but senior Chinese officials have repeatedly said Beijing is committed to honouring the deal.

US official data and industrial data show China has bought more agricultural and energy products in recent months.

However, the article noted that looking at the development of China-US relations in the past half- year, the trade deal has been a relatively stable aspect of the relationship between the two countries.

“Yet for the long way ahead that’s expected from the trade talks, this is only the first round of the game and the first step to solve problems, let alone the long-term development of the bilateral relations,” the article said.

On Tuesday at the Republican National Convention, a precursor to the US presidential election in November, US Secretary of State Mike Pompeo applauded Trump for ending a “ridiculously unfair trade arrangement with China that punched a hole in our economy”.

Trump launched a trade war in 2018 by slapping tariffs on Chinese goods in an effort to close a trade deficit Washington says stood at US$419.2 billion that year.

This article appeared in the South China Morning Post print edition as: Trade deal with US ‘must be separated from other issues’

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