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#1 02-07-2019 15:59:03

johnedward
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USD: What should we expect in terms of China-USA trade relations?

USD: What should we expect in terms of China-USA trade relations following last weekend's truce?


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The US and China are moving towards greater cooperation, although it will take several years to resolve the ongoing trade dispute, some analysts said on Monday.

"I think we are really engaged in a process that could take five or six years," said Timothy Stratford, President of the US CoC in Beijing at the World Economic Forum in Dalian, China.

"I am more optimistic in the medium term that both governments and both countries will be in a better position," he reported.

Chinese President Xi Jinping and US President Trump agreed last weekend to continue trade negotiations after talks deteriorated 2 months ago. Trump said the US would refrain from imposing new tariffs on Chinese products and would consider allowing US companies to sell to Chinese telecommunications giant Huawei, blacklisted by America since May.

As for Beijing, it's taken a tougher stance against the US recently and has threatened to publish its own blacklist.

Wei Jianguo, former Deputy Minister at the Chinese Ministry of Commerce, said yesterday that by relaunching trade negotiations, there is "a new starting point, a better shared understanding".

"I think the situation will be resolved soon," said Mr. Wei, but he refused to give a date.

It is not certain that the temporary truce will lead to an agreement, especially since major political disagreements remain between the two major economies. For Americans focused on next year's presidential election, the call for pressure on China and its technological development has intensified from both political parties.

"The problem is that if China does not accelerate its openness and reforms, it will unite all parties in the United States," said Charles Li, executive director of the HK Stock Exchanges.

Critics claim that Beijing has failed to live up to the promises made when China joined the WTO 18 years ago and that efforts to open its economy to foreign companies have been far too slow.

"That is why we encourage all our members, including the first ones, to engage in discussions and take serious reform measures."

This past weekend, the Chinese government announced that it would remove some restrictions on foreign investment in industries such as oil and gas exploration, mining and agriculture. Beijing has also published a new list of areas in which foreign investment is sought, including data networking equipment and cloud computing.

Authorities rushed to adopt a new law on foreign investment in the first quarter, which will come into force in 2020 and claims to improve intellectual property protection and prohibit the forced transfer of technology.

However, he noted that the United States and Beijing are increasingly interested in each other's access to technology, and that the events of recent months will only accelerate China's development in this area.

It is not clear to what extent the two countries will return to the better relationship of past years, according to Marro, adding that he expects trade tensions to resurface again next year.


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