Trump Official Says China’s Slow Reform Disappointed The U.S.

Ratcheting up the pressure on the world’s second-largest economy ahead of President Donald Trump’s visit to China next month, the U.S. has been disappointed this year at China’s lack of progress in pursuing market-oriented reforms, said a senior administration official.

The U.S. is concerned now with subsidies, excess capacity, and its industrial policy, even while China made progress in previous decades toward market pricing and reducing the number of state-owned enterprises, said the official, who asked not to be identified in order to discuss sensitive policy issues.

The official said that the U.S. had hoped for more follow-through on reform following a meeting earlier this year between President Xi Jinping and Trump in Mar-a-Lago which turned out to be very good. The sources said that no desired results were yielded even after the Comprehensive Economic Dialogue between the two economies a few months after the meeting between the two leaders.

A few days ago, Secretary of State Rex Tillerson noted in an interview growing U.S. impatience with China on issues from North Korea to trade and the official’s comments follow that interview. Scheduled to attend a meeting of leaders from the Asia-Pacific Economic Cooperation, or APEC, in Vietnam, Trump is due to visit Beijing on Nov. 8 as part of his first trip to Asia.

The official said that Xi is given ample room for building a stronger, more market-oriented economy as the leader is clearly in a strengthened position, as was demonstrated by his address to the Communist Party last week.

Finance ministers and delegates from the 21-member APEC were meeting ahead of the leaders’ summit in early November in Hoi An, Vietnam, and the official reportedly spoke amid those talks in Hoi An. While trade was discussed at length among the delegates it wasn’t included in the final joint statement even though it is a hot-button issue between the U.S. and China.

As Trump pushes for renegotiation of existing pacts in the name of “America First”, the president’s and his administration’s policies on trade have emphasized “fair” over “free” trade and criticism of China’s practices remained a central part of that.

The official reportedly said that trade isn’t growth-oriented enough from the U.S.’s perspective. Rather than through increasing debt through non-transparent loans or through gaining an advantage by creating subsidies and industrial policy, trade should be market-oriented, and free and fair, the U.S. official reportedly said.

China’s Belt and Road Initiative too should allow more free-market practices, the U.S. noted even amid China’s massive long-term push to finance infrastructure projects throughout the region and beyond in the Belt and Road Initiative. many of the projects with Chinese involvement have meant state-owned entities play a major role, with less transparency, even while the China-led Asia Infrastructure Investment Bank has made progress on that front, the U.S. official reportedly said.

Two calls and a fax to China’s foreign affairs ministry went unanswered Sunday outside office hours

(Adapted from Bloomberg)


Categories: Economy & Finance, Uncategorized

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