MOFCOM: trade talks progress smoothly
November 5, 2019 Category China News Round-up, Weekly
U.S. Trade Representative Robert Lighthizer (left) and U.S. Treasury Secretary Steven Mnuchin (right) with China’s Commerce Minister Zhong Shan during October’s trade talks in Washington.
Leaders of the negotiating teams of China and the United States will held talks by phone, and the White House said the U.S. government still expects to nail down a “Phase One” deal in November. China’s Ministry of Commerce (MOFCOM) said that both sides have maintained close communication, and negotiations are progressing smoothly. A “phase one” had been expected to be signed by Presidents Trump and Xi at the Asia-Pacific Economic Cooperation Economic Leaders’ Meeting on November 16 and 17 in Chile, but Chilean President Sebastian Pinera called off the meeting because of the political crisis gripping the country. China and the U.S. have essentially completed technical consultations on part of the text for a preliminary agreement outlined in the latest high-level talks.
China accused the U.S. of “economic bullying behavior” after U.S. regulators proposed to cut off funding for Chinese equipment in U.S. telecommunications networks. China would “resolutely oppose the U.S. abusing state power to suppress specific Chinese enterprises with unwarranted charges in the absence of any evidence,” Foreign Ministry Spokesman Geng Shuang said. “The economic bullying behavior of the U.S. is a denial of the market economy principle that the U.S. has always advertised,” Geng said, adding the U.S. actions would “undermine the interests” of U.S. businesses and consumers, especially in rural areas. “We would like to urge the U.S. once again to stop abusing the concept of national security,” Geng said. The Federal Communications Commission (FCC) votes next month on whether to bar telecom companies from using government subsidies to pay for networking equipment from Huawei and ZTE, who would have 30 days to contest the FCC’s decision and a final order compelling removal of equipment is not expected until next year at the earliest. “In 30 years of business, Huawei has never had a major security-related incident in the 170 countries where we operate,” said a Huawei spokesman in Shenzhen. Citing U.S. media reports, Geng said the U.S. Rural Wireless Association has estimated that 25% of its members have Huawei and ZTE equipment in their networks, and that replacing them would cost USD800 million to USD1 billion.
At a two-day symposium jointly organized in Singapore by the National University of Singapore’s Lee Kuan Yew School of Public Policy and the Brookings Institution of the U.S., Zeng Peiyan, Chairman of the China Center for International Economic Exchanges and a former Vice Premier of China, said that the idea of the U.S. decoupling from China goes against the laws of economics, international rules and fair order. Decoupling will benefit no one from a macro-economic perspective and will severely damage the interests of businesses and consumers, he said. In trade, decoupling will lead to a man-made breakdown of the global value chain. As globalization expands, trade and investment are intertwined with massive cross-border flows of goods, services and production with a closely linked and inseparable global supply chain, industrial chain and value chain. China and the U.S. both hold important positions in the three global chains. “To oppose decoupling and step up cooperation is the only option that serves the interests of China and the US,” Zeng told guests.
Legitimate concerns need to be addressed to create ‘as much space for doing businesses as possible’, Tim Stratford, Chairman of American Chamber of Commerce in China said. The appeal comes as the U.S. is reviewing Beijing ByteDance Technology’s USD1 billion purchase of an American social media app Musical.ly in 2017. “We in the business community hope these issues can be resolved in a way that protects both countries’ national security but gives us as much space for doing business as possible,” he said. Although negotiators from the two countries were working to find a resolution to the trade war, the issue of national security had not been addressed, Stratford said. “But until those discussions take place, the business community remains concerned” that Beijing or Washington might impose restrictions that will affect companies’ operations, he added.
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