[CTC] China tosses a trade bone to the White House

Mon Apr 10 11:12:48 PDT 2017

Three articles below...

http://www.politico.com/story/2017/04/trump-tweets-china-trade-military-237030 <http://www.politico.com/story/2017/04/trump-tweets-china-trade-military-237030>
Trump tweets: 'Time will tell' on trade with China

By Rebecca Morin <http://www.politico.com/staff/rebecca-morin>
04/08/17 11:58 AM EDT

President Donald Trump tweeted Saturday morning that only "time will tell" on trade with China, in addition to congratulating the military for the Syria airstrikes.

"It was a great honor to have President Xi Jinping and Madame Peng Liyuan of China as our guests in the United States. Tremendous..." the president wrote. "...goodwill and friendship was formed, but only time will tell on trade."

Throughout the campaign and upon taking office, Trump often bashed China and blamed it for the loss of U.S. jobs. Trump has also criticized trade deals such as NAFTA.

Last week, Trump signed an executive order that instructed his administration to examine the U.S. trade deficit with China and other major trading partners and to report back within 90 days with actions to help reduce the gap.

In addition, Trump also praised the military in a tweet.

"Congratulations to our great military men and women for representing the United States, and the world, so well in the Syria attack," he wrote.

The airstrikes targeting a regime airbase in Homs were conducted Thursday following a chemical attack in Syria.

On Friday, the president spoke with Saudi Arabia's King Salman bin Abd al-Aziz Al Saud, where the king "reaffirmed strong Saudi support for the United States military strike against the Sayrat Airfield in Syria," according to a White House readout of the call released on Saturday.

Both leaders emphasized their "commitment to strengthening the longstanding relationship between their two countries" and said they are both committed to remaining in contact "on a range of regional and bilateral issues."

Trump spent more than five hours at Trump International Golf Club in West Palm Beach Saturday, where he golfed. A list of his golfing partners has not been released.

INSIDE US TRADE

Ross: U.S., China agree to a '100-day plan' on trade

April 07, 2017 
The U.S. and China have established a “100-day plan” on trade following a breakthrough in discussions between President Trump and his Chinese counterpart, according to Commerce Secretary Wilbur Ross.
Briefing reporters after Trump's meeting with China's president, Xi Jinping, Ross – flanked by Treasury Secretary Steven Mnuchin and Secretary of State Rex Tillerson – said he thought the most significant development from two days of talks was the 100-day plan.
“Normally, trade discussions, especially between China and ourselves, are denominated in multiple years,” he said. “This was denominated in the first instance in 100 days with hopefully way stations of accomplishment along the way. Given the range of issues and the magnitude, that may be ambitious, but it's a very big sea change in the pace of discussions. And I think that's a very very important symbolization of the growing rapport between the two countries.”
Ross added that “you would not have expected us to reach agreement in a few hours of meetings. The issues are far more complex and far more deep-rooted. But 100 days is a very, very short time for trade.”
Asked for details on the “way stations” established as part of the plan, Ross said they are “a matter of negotiation itself. But, directionally, the objective is to increase our exports to China and to reduce the trade deficit that we have with them.”
Ross added that the two sides discussed a “very wide range of products,” adding, “the most interesting thing to me was they expressed an interest in reducing their net trade balance because of the impact it’s having on money supply and inflation. That's the first time I’ve heard them say that in a bilateral context.”
Mnuchin said he thought China had acknowledged a need for a more “balanced trade environment,” with the 100-day plan expected to lead to more specifics. The Treasury secretary declined to answer whether his department will label China a currency manipulator – as candidate Trump promised to do on day one – but noted a Treasury report on currency is due out next week.
Tillerson revealed that the two presidents established what he called a “new high-level framework for negotiations” called the U.S.-China Comprehensive Dialogue, which they will oversee. He said it will have four pillars: a diplomatic and security dialogue; a comprehensive economic dialogue; a law enforcement and cybersecurity dialogue; and a social and cultures issues dialogue.
Trump, according to Tillerson, noted the “challenges caused by Chinese government intervention in its economy and raised serious concerns about the impact of China’s industrial, agricultural, technology, and cyber policies on U.S. jobs and exports.” Trump also “underscored the need for China to take concrete steps to level the playing field for American workers, stressing repeatedly the need for reciprocal market access,” the secretary of State said.
Tillerson added that the chemistry between the two presidents was positive.
“The posture between the two really set the tone for our subsequent meetings between our high-level delegations,” he said. “And I would tell you the exchanges were very frank. They were candid, they were open, and they were very positive. So I think all of us are feeling very good about the results of this summit in terms of what it did for setting a very constructive tone going forward.”
Mnuchin alluded to another “comprehensive economic dialogue” he and Ross will lead, which “will be focused on trade, investment, and other economic opportunities between both countries.”
“We focused specifically on a more balanced economic relationship, specifically on trade,” Mnuchin said. “And we focused on the desire to have very specific action items both in the short term for the next time we get together, as well as what the goals are over the year. So I think we think the restructuring of the dialogue and having specifically a breakout that will address comprehensive economic opportunities across our different agencies both here and within China I think we felt was very productive, very good start in how we're going to structure it, and again, very specific things that we talked about to look forward on making progress in the short term on.”
Trump, the cabinet officials said, has accepted an invitation to visit Xi and China in 2017. – Dan Dupont (ddupont at iwpnews.com <mailto:ddupont at iwpnews.com>)

https://www.ft.com/content/40e77a5c-1de6-11e7-b7d3-163f5a7f229c <https://www.ft.com/content/40e77a5c-1de6-11e7-b7d3-163f5a7f229c>

China tosses a trade bone to the White House

Beijing’s decision is economically insubstantial but politically savvy
54 minutes ago

Nearly 40 years since starting to liberalise its economy, China’s adoption of a fully fledged market economy is still far from complete. But one thing it has picked up from the democratic capitalist west along the way is an ability to spin small changes in policy to placate its international partners.

China showed its prowess in this area by offering some trade liberalisation measures following Xi Jinping’s meeting with Donald Trump in the US last week. Beijing is ready to lift a hygiene-related ban on American beef imports, which has been in place since 2003, and remove some restrictions on foreign companies investing in its financial services sector. By giving Mr Trump some impressive-sounding victories to tout at home, China may hope to forestall some of the wilder protectionist acts the US president has been threatening. Yet ironically, one of the outcomes it is keen to avoid — having the administration label China a currency manipulator — is one for which there is no basis and hence it can do little to affect. It is genuinely innocent.

China’s decision was designed to make a big noise without necessarily changing very much. The pronouncement on beef involved a highly symbolic American product. The agreement to open its financial services sector, meanwhile, may not make a dramatic difference in reality. Western companies are likely to be chary about plunging into a debt-laden Chinese financial system.

The selective nature of Beijing’s policy change underlines the fundamental problem with its trade and regulatory policy. Despite more than 15 years’ membership of the World Trade Organization, China’s economy remains resistant to foreign investment in many sectors and its trade is distorted by regulatory interference.
Related article
Global institutions mount joint defence of trade benefits

Report by IMF, World Bank and WTO made public week before finance ministers meet in Washington

This week’s offer is not a substitute for substantive liberalisation, particularly in the service sector. Rather than threatening WTO-illegal actions on tariffs, Mr Trump’s administration would do better to pick up negotiations with Beijing on a bilateral investment treaty, which were left over from Barack Obama’s administration and could deliver considerable access to Chinese service markets.

In the nearer term, Mr Trump faces the decision of whether to follow through with a manifesto promise that will have very little effect in practice, except to inflame diplomatic tensions. On the campaign trail, he promised to designate China as a currency manipulator on day one of his administration. The US Treasury’s biennial currency report, due to come out later this week, provides him with an opportunity.

There are, however, two rather substantial problems with doing so. One is that such a designation has no impact whatsoever beyond compelling the US Treasury to negotiate with China, which it is already doing. The second is that China is desperately trying to prop up its currency to prevent financial instability, not hold it down to give it competitive advantage. It is in no one’s interest, including the US, if Beijing suddenly stops intervening to defend the renminbi and a destabilising rush of capital flight and sharp devaluation follows.

The US administration is learning that making substantial and constructive gains in trade negotiations is slow incremental work. It is to be hoped that Mr Trump does not get frustrated with the pace of change and unleash the destructive policies he promised before he came to office.

China will not offer him rapid and widescale liberalisation. But accepting what it can get and carefully and continuously pushing for more is America’s best course of action.

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