Leaders of the two countries agreed to hold a bilateral meeting on the sidelines of the G20 summit in Argentina, following a phone conversation in early November, amid escalating trade tensions that led to both sides introducing steep reciprocal tariffs on each other in recent months.
The Chinese Foreign Ministry also expressed hope for both sides to reach an agreement during the upcoming G20 summit.
"We hope that the US side could follow the consensus reached by the two heads of state during their recent phone call, focus on cooperation, remove disturbances, and engage in serious consultations on issues of mutual concern with good faith on the basis of mutual respect, reciprocity and mutual benefit so as to reach a proposal acceptable to the two sides and bring into reality the aspiration of ensuring sound and steady development of China-US relations and expanding bilateral economic and trade cooperation," Chinese Foreign Ministry Spokesperson Hua Chunying said during a regular press briefing last week.
Despite the hawkish stance US trade representative Lighthizer expressed on Tuesday, the two countries are likely to reach an agreement that could temporarily suspend bilateral trade tensions, without resolving fundamental disputes in the trade frictions, Chinese economists suggested.
"In the short-term, the new statement [from Lighthizer] can be used as a bargaining chip during the G20 summit to seek more concessions from China. From a long-term perspective, this new report indicates that even if both sides reach a temporary agreement during the G20 summit, it doesn’t mean the bilateral trade war is over. The best outcome of the G20 summit is a short-term reconciliation," Cheng Dawei, a professor of economics at Renmin University in Beijing, who specializes in international commercial diplomacy and WTO related studies, told Sputnik.
The expert stressed that the outcome of the G20 summit depends on what the United States decides to do.
"China sincerely hopes both sides can reach an agreement during the G20 summit. The report on Tuesday could be part of the bargaining strategic from the United States to put more pressure on China before the meeting. That’s why it’s possible for an agreement to be reached during the summit," she said.
The expert believes both countries are likely to only agree to avoid introducing new tariffs on each other, without lifting the tariffs that have already been implemented.
China Catching up
"In the period following the publication of the Section 301 Report, China has deliberately downplayed the importance of and reduced official media attention on the Made in China 2025 policy … Despite this transparent attempt to deemphasize Made in China 2025 in public, China continues to implement this industrial policy on a large scale," the report said.
The Section 301 report released in March explained why China’s new industrial policy could hurt US business interests.
"Newer plans such as the Made in China 2025 Notice and the various plans focused on information and communications technologies call for a wide array of Chinese government intervention and financial and other support designed to transform China into a world leader in technology. While these policies and practices are not necessarily new, their actual and potential effects on foreign companies and their technologies have become much more serious … a key part of China’s technology drive involves the acquisition of foreign technologies through acts, policies, and practices by the Chinese government that are unreasonable or discriminatory and burden or restrict US commerce," the report said.
However, Chinese economists argued that this Chinese industrial policy is targeted because the United States is worried that China could soon catch up with it.
"It’s impossible for China to cancel or give up on the Made in China 2025 policy. The real complaint [on this policy] came from US concerns that China could soon catch up with it. The excuses they found are that China has used ‘illegal and unfair practices’ to catch up. But the fundamental issue is the United States is not happy and has become worried that China could soon catch up with it. But we can’t resolve this problem. If you don’t want us to catch up, we just need to give up? Why is that?" Tu Xinquan, the dean of China Institute for WTO Studies, the University of International Business and Economics in Beijing, told Sputnik.
"We can revise this policy or propose a new one that stresses on ‘opening up’ toward foreign companies. Even if Chinese government offers subsidies to a certain industry, foreign companies should be eligible to enjoy the same benefits. In this way, you [the United States] can’t complain anymore," he said.
To ease similar concerns of China’s rise among other countries, Chinese authorities could work on proving to the world that other nations can stand to benefit from China’s rapid development, the expert added.
"The competition [between the United States and China] is unavoidable. But we need to make sure the method we used to compete can win approval from other nations. We need to convince other third parties, including European countries and Japan, that China’s development is beneficial to everyone. The problem today is that some countries have issues with the Chinese way of development and its impact on other countries. For China, we can’t resolve concerns from the United States completely. But we can try to reassure other nations that China’s rise is beneficial to the world," he said.
The expert believes that it is possible for China to completely lift the requirement of forcing foreign companies investing in China to set up joint ventures with local Chinese companies in the future.
The views and opinions expressed by the speakers do not necessarily reflect those of Sputnik.