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Improving Outlook for US-China Trade Ties

Feb 10-2021   



Though the Biden Administration is unlikely to de-prioritize trade policy goals, its potential policy adjustments might stabilize trade ties with China, said Prof. Lu Feng of the NSD in a recent forum organized by China Finance 40 (CF40) and the Petersen Institute for International Economics (PIIE).

 

China has reasons to see the US power transition as an opportunity for positive improvement in bilateral relationships, said Prof. Lu. In the short term, China might demand the US to revoke the duties on Chinese goods and sanctions on Chinese high-tech firms imposed by the Trump Administration. Meanwhile, China is in possession of some policy options that can be tapped to move bilateral ties for the better. In 2020, China acceded to the RCEP and wrapped up the CAI talks, both of which contain measures that could be invoked to narrow the systemic and regulatory gaps between China and the US; for example, the ones about lowering ‘inside-borders barriers’ and promoting ‘systemic opening-up’.

 

The Biden Administration will still put US-China trade ties on top of agenda. Many doubts have been raised about the first-phase deal between the two countries, but the new US government is highly likely to carry through its implementation. China’s imports of US goods have shot up in the last half year despite the onslaught of the pandemic. Moreover, the Biden Administration will care more about new negotiations concerning so-called structural issues, such as SOEs, government subsidies, and transparency. On these issues, the American side might strengthen the dynamics between bilateral talks and multi-lateral and regional negotiations. Furthermore, President Biden might seek China’s cooperation in the establishment of new rules for the digital economy, the fight against the pandemic, and exchange rates and external balance.

 

The forum centered on US-China economic and financial relationships in new situations. Prof. Lu is NSD Jin Guang Chair Professor and specializes in RMB exchange rates, balance of international payment, and capital returns, among others.

 

Improving Outlook for US-China Trade Ties

Feb 10-2021   



Though the Biden Administration is unlikely to de-prioritize trade policy goals, its potential policy adjustments might stabilize trade ties with China, said Prof. Lu Feng of the NSD in a recent forum organized by China Finance 40 (CF40) and the Petersen Institute for International Economics (PIIE).

 

China has reasons to see the US power transition as an opportunity for positive improvement in bilateral relationships, said Prof. Lu. In the short term, China might demand the US to revoke the duties on Chinese goods and sanctions on Chinese high-tech firms imposed by the Trump Administration. Meanwhile, China is in possession of some policy options that can be tapped to move bilateral ties for the better. In 2020, China acceded to the RCEP and wrapped up the CAI talks, both of which contain measures that could be invoked to narrow the systemic and regulatory gaps between China and the US; for example, the ones about lowering ‘inside-borders barriers’ and promoting ‘systemic opening-up’.

 

The Biden Administration will still put US-China trade ties on top of agenda. Many doubts have been raised about the first-phase deal between the two countries, but the new US government is highly likely to carry through its implementation. China’s imports of US goods have shot up in the last half year despite the onslaught of the pandemic. Moreover, the Biden Administration will care more about new negotiations concerning so-called structural issues, such as SOEs, government subsidies, and transparency. On these issues, the American side might strengthen the dynamics between bilateral talks and multi-lateral and regional negotiations. Furthermore, President Biden might seek China’s cooperation in the establishment of new rules for the digital economy, the fight against the pandemic, and exchange rates and external balance.

 

The forum centered on US-China economic and financial relationships in new situations. Prof. Lu is NSD Jin Guang Chair Professor and specializes in RMB exchange rates, balance of international payment, and capital returns, among others.