Out of the blue<\/b>
\nHow real is the deal? We may not know for a couple of weeks yet (if not longer) but recent talks between China and the United States have resulted in an initial announcement that Beijing will prioritize closing the trade gap with the U. S. by purchasing significantly greater amounts of goods. Included in the few details offered thus far is a plan to increase both agricultural and energy exports from America. While China\u2019s Foreign Ministry disputed some of the target amounts, the rest of the announcement looks as if it may soon become a reality. (CNN)
Both parties said in a joint statement on Saturday that China has agreed to \u201csignificantly increase\u201d purchases of US goods and services, in order to reduce the trade imbalance between the two countries. This was a top demand of the Trump administration during two days of trade talks in Washington with Chinese officials.
\u201cTo meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of United States goods and services,\u201d the statement said. \u201cThis will help support growth and employment in the United States.\u201d
The pledge for more cooperation comes as the US and China, the world\u2019s two largest economies, have threatened tens of billions of dollars in tariffs that could lead to a trade war.
Business Insider has another nugget from the Chinese announcement which, if confirmed, could be even bigger. They\u2019re reporting that the agreement includes a pledge that China will \u201c advance relevant amendments to its laws and regulations \u201d to allow for more American imports, including changes to patent laws. (My emphasis)
If China is actually ready to start showing more respect for patent laws and intellectual property rights, that would be a game-changing moment in international relations. They\u2019ve consistently been among the worst on the planet in terms of stealing the intellectual capital of others, engaging in reverse engineering and taking over manufacturing sectors through the use of cheaper labor and government subsidies.
So China must be getting something in return for all of this, right? One part of it had to be the already realized objective of saving ZTE, the major Chinese phone company that Trump already agreed to bail out. Beyond that, there\u2019s probably some face-saving agreements in terms of trade in the other direction, but mostly they might just be looking to avoid a trade war with a White House administration which showed no signs of backing down. In fact, Chinese Vice-Premier Liu He, who was in charge of the negotiators in Washington, is quoted as saying, \u201cThe two sides reached a consensus, will not fight a trade war and will stop increasing tariffs on each other.\u201d
President Trump needed to close the trade deficit (being one of his campaign promises) and the Chinese really don\u2019t want to get into a massive trade war and deal with all manner of tariffs and restrictions. Trump had already begun putting such measures in place and it sounds like the Chinese didn\u2019t see any way to call his bluff. (Because he apparently wasn\u2019t bluffing to begin with.)
It\u2019s also likely that neither side wanted to see the military escalation go any further. At the same time as Xi Jinping was working with Trump to broker a deal over North Korea, the Chinese were launching a new aircraft carrier group and acting increasingly hostile in the South China Sea. But that leads to one question in terms of what else China might have gotten in the bargain. Did the White House give some sort of indication that we weren\u2019t going to be quite so \u201centhusiastic\u201d when it comes to defending Taiwan now that their new government is making increasingly loud noises about independence?
Again, those details will need to wait. But something in the Sino-American relationship changed this weekend. I\u2019m sure Trump\u2019s critics will find plenty of room to complain, but it\u2019s honestly difficut to see this as a negative development if the details turn out to be as advertised.<\/p>\n

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