China, U.S. sign phase-1 trade deal, adding certainty to global economy

Xinhua report

U.S. President Donald Trump and Chinese Vice Premier Liu He signed the China-U.S. phase-one economic and trade agreement during a ceremony at the White House in Washington D.C. on Jan. 15, 2020. The phase-one economic and trade agreement that both sides said benefits each other and the whole world, a progress welcomed by businesses, investors and observers.
The deal is a hard-won phased outcome for the U.S.-initiated trade tensions with China, and the progress shows that the world’s two largest economies are seeking a more rational way to break the deadlock and inject positive energy into the stability and development of the world economy.
After nearly two years’ strenuous negotiations, Chinese Vice Premier Liu He and U.S. President Donald Trump inked the papers at the White House East Room on behalf of their respective countries, injecting stability into bilateral relations and adding certainty to global growth.
It “shows that our two countries have the ability to act on the basis of equality and mutual respect, and work through dialogue and consultation to properly handle and effectively resolve relevant issues,” Chinese President Xi Jinping said in a message to Trump read out by the vice premier at the signing ceremony.
Path forward
The signing of the deal is a positive first step for resolving the economic and trade issues between the world’s top two economies, and the priority now is to implement the deal, and get off to a good start for China-U.S. economic and trade ties.
In the next step, the two sides need to implement the agreement in real earnest and optimize its positive impact, so as to make even greater progress in China-U.S. trade and economic cooperation, Xi said in his message to Trump.
Speaking at the signing ceremony, Liu expressed the hope that both sides will work together under the principle of equality and mutual respect, strictly honor the agreement, accommodate each other’s core concerns, and ensure a good implementation of the phase-one trade agreement.
“It is the pressing need and will also play an important role in the growth of bilateral economic and trade relations in the future,” he said.
Robert Kuhn, chairman of the Kuhn Foundation and a leading U.S. expert on China, told Xinhua on Wednesday that the deal is a “milestone” in international trade and China-U.S. relations. The phase-one deal “does not solve all problems forever, but by providing stability for China-U.S. economic relations, it does give the entire world greater economic confidence and increases opportunities for global prosperity,” he said.
“I am confident that both sides will adhere to the deal,” Kuhn said.
President Xi has said that there are a thousand reasons to make the China-U.S. relationship work, and no reason to break it, Liu noted at the press briefing. The two countries have a lot of shared interests, and can certainly find a way to manage their differences and engage in win-win cooperation, Liu said.
An agency report adds, “Together, we are righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers and families,” Trump said in rambling remarks at the White House alongside U.S. and Chinese officials.
Chinese Vice Premier Liu He read a letter from President Xi Jinping in which the Chinese leader praised the deal as a sign the two countries could resolve their differences with dialogue.
The centerpiece of the deal is a pledge by China to purchase at least an additional $200 billion worth of U.S. farm products and other goods and services over two years, above a baseline of $186 billion in purchases in 2017, the White House said.
Commitments include $54 billion in additional energy purchases, $78 billion in additional manufacturing purchases, $32 billion more in farm products, and $38 billion in services, according to a deal document released by the White House.
The South China Morning Post adds: Vice-Premier Han Zheng told the World Economic Forum that China’s trade deal with the United States will not hurt rival exporting nations as complaints mount from governments that were left out of the agreement.
Han said that China’s commitment to buy more from the US are in line with its World Trade Organisation (WTO) obligations and will not squeeze out other imports.
He also pledged to lower barriers for foreign investors as he set out the case for China’s engagement with the global economy.
“The phase one trade deal is good for the US, China and the world. China’s increasing purchases of US goods are in accordance with WTO guidelines and will not impact its imports from other countries,” Han told an audience in Davos, Switzerland on Tuesday. “China will open its door wider. Though facing some protectionism from some countries, the determination to open up will not waver.”
The speech came less than a week after another of China’s Vice-Premiers, Liu He, signed a phase one deal intended to de-escalate a trade war with US President Donald Trump.
The accord saw China commit to crack down on the theft of American technology and corporate secrets by its companies and state entities, while outlining a US$200 billion spending spree to try to close its trade imbalance with the US
Han made the comments just as Trump gave his own speech in Davos, in which the US president claimed credit for overseeing an economy enjoying its longest expansion yet, with an unemployment rate that fell to a five-decade low after tax cuts, deregulation and improved trade deals.

Leave a Reply