Vice-Premier Liu He is off to Washington next week to sign the phase one trade deal hammered out by China and the United States in November.
“At the invitation of the US, Liu He will be leading a delegation to Washington from January 13 to January 15 to sign the phase one deal,” Gao Feng, a ministry spokesman, told a weekly media briefing.
“Both parties are in close communication regarding the detailed arrangement of the signing,” he added, without providing more details.
What is believed to be a limited accord will pave the way for phase two talks and comes after a depressing year for China’s economy.
But first, there will be the signing ceremony of the mini deal, which includes four key areas of concern. While details are sparse, they will take in intellectual property rights, currency manipulation, financial services and increased agricultural and seafood imports from the US worth a reported US$50 billion.
In exchange, the US agreed to freeze planned tariffs worth $160 billion on Chinese imports, which were due to kick-in on December 15. Duties imposed in September on goods valued at up to $120 billion will be halved to 7.5%. The reductions will take effect 30 days after the agreement is finalized.
But tariffs imposed earlier on Chinese imports to the US worth $250 billion will remain at 25%.
Last month, US Trade Representative Robert Lighthizer gave a glimpse of the 86-page document during a press conference in Washington.
Speaking in the Eisenhower Executive Office Building, he said:
“This is a very, very important step forward. Some people say, ‘Well, you didn’t do some of the most difficult things,’ and of course that’s true. But you can look at it the other way just as easily and say the most difficult part is getting the first deal. That is the hardest part.”
Lighthizer also made it clear that the agreement would eventually be published for public scrutiny.
In the meantime, spokesman Gao refused to confirm Lighthizer’s assessment that China was committed to purchasing goods and products worth $200 billion from US manufacturers, farmers, energy majors and financial service providers in the next two years, the AFP news agency reported.
“Pardon me if I don’t pop the champagne, but aside from a cessation of continued escalation, there is not much worth cheering,” Scott Kennedy, of the Center for Strategic and International Studies, said after the deal was announced late last year.
“With only limited concessions, China has been able to preserve its mercantilist economic system and continue its discriminatory industrial policies at the expense of China’s trading partners and the global economy,” he added.
To recap, US President Donald launched the trade war nearly two years ago. Initially, it was aimed at reducing the massive deficit with Beijing, which stood at $419 billion in 2018. During the first nine months of 2019, the figure climbed to $500 billion.
But as the conflict dragged on, the White House extended the parameters to include China’s state-backed economic model, which has increased under Xi.
Intellectual property rights, cybertheft and the slow pace of opening up and reforming other sectors of the world’s second-largest economy were also added into the mix.
As the atmosphere between Washington and Beijing turned toxic, a second front surfaced. A technological row broke out with the White House imposing sanctions on Chinese tech giants Huawei and ZTE, as well as other key players.
Solving that conundrum will take more than 86 pages. But then, reaction to the Sino-American “mini” agreement has been “lukewarm” from the start.
“Nothing gained but lukewarm purchases after 18 months of a costly trade war,” James M Zimmerman, the former chair of the American Chamber of Commerce in China, said last month. “The very fact that this is ‘phase one’ is a reflection of utter defeat.”
You can be sure that the word “defeat” will not be mentioned in Washington next week.