It is important to note that concessions made by China are largely insignificant and non-systemic. U.S. demands that it stops the forcible transfer of U.S. technology to Chinese firms, stop industrial espionage, stop non-compliance of U.S. intellectual property rights, have largely been unaddressed.
On Friday, a Chinese state newspaper’s report hoped that China and the United States would be able to strike a “partial” trade deal since it would benefit both sides.
Although both sides have slapped duties worth hundreds of billions dollars on each other, with China having significant trade surplus with the United States, clearly U.S. tariffs are having their intended effects.
Beijing is also aiming to cool down the escalating trade war since a fresh wave of U.S. tariffs are set to kick in next week. Chinese trade negotiators are hoping to delay a U.S. tariff hike with China’s top trade negotiator, Vice Premier Liu He, stating on Thursday that China is willing to reach an agreement with the United States on matters that both sides care about so as to prevent friction from leading to any further escalation.
The desperation from the Chinese side is very visible with Liu saying “the Chinese side came with great sincerity” while China’s official China Daily newspaper, China’s ruling party’s mouthpiece, saying in an editorial in English that “A partial deal is a more feasible objective”
In an effort aimed at showing its sincerity, just hours ahead of an expected meeting between China’s Liu and U.S. President Donald Trump at the White House, China’s securities regulator unveiled a firm timetable for scrapping foreign ownership limits in futures, securities and mutual fund companies, for the first time.
This is yet another example that U.S. trade strategy China is working. Previously, China had said it would open up its financial sector at its own pace and on its own terms. Clearly Beijing is eager to kowtow to Washington’s demands and show progress.
Another Chinese effort to show that they have made some progress is the U.S.-China currency agreement. According to currency experts this agreement does not change the dollar-yuan relationship, one that has been a thorn in the side of Trump.
On its part the U.S. has widened its crackdown on China and has blacklisted its public security bureaus as well as its top artificial intelligence startups who have been aiding China’s ruling Comunist Party to run concentration camps housing Muslim minorities.
The desperation on the Chinese side was once again visible with Friday’s China Daily editorial stating negotiations were the “only window” to end deteriorating trade relations.
Trump has made it lucidly clear that China will have to change its intellectual property and industrial policy practices, both of which cost millions of U.S. jobs.
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