10 November Beijing-Chinese President Xi Jinping and his US counterpart Donald Trump witnessed the signing of dozens of trade deals with record-breaking volumes in Beijing, which experts say will help narrow the trade imbalance, one of Trump’s biggest concerns.
On the second day of Trump’s state visit to China, a total of $253.5 billion in deals in sectors ranging from agricultural produce to high-tech products were reached, in what Chinese Minister of Commerce Zhong Shan described as a “miracle.”
However, negotiations are still needed to tackle the structural issues that caused the imbalance of trade between the two economies, experts said.
The record-breaking deals include a $37 billion deal between American plane maker Boeing and a Chinese plane purchasing agency, a $12 billion deal for Qualcomm Inc to sell its chips to three Chinese handset makers, and a deal between a consortium involving China’s top State oil company China Petrochemical Corp to help develop Alaska’s liquefied natural gas sector worth up to $43 billion.
Gong Ting, assistant research fellow at the China Institute of International Studies, said the massive orders will “set a tone of stability” to business communities in the two countries and the world as “the volume is unprecedented and the content of the deal is substantial.”
“Soybeans, airplanes, technology and financial sector cooperation are the highlights of these deals, and the spotlight also goes to the energy sector, which is considered a fast-growing area of cooperation due to the sector’s vast potential,” Gong told the Global Times on Thursday.
“Obviously the fruits of these deals in the future will translate into economic development in terms of improving people’s livelihood, generating employment and raising tax revenues in both countries,” Gong said.
“SAS sees incredible opportunity in China now, and in the future. Participating in the trade mission signals our strong commitment to work with Chinese government organizations to help them realize their bold technology goals,” Nick Lisi, executive vice president of US-based analytics SAS, said in an e-mail sent to the Global Times on Thursday.
SAS is the only software company in Trump’s business delegation.
Huo Jianguo, vice chairman of the China Society for WTO Studies, said such a massive package of deals will be conducive to the development of trade and investment between China and the US, and to some degree, it would temporarily reduce the trade imbalance.
“These deals will provide a better atmosphere for the two sides to sit down and together work out the structural issues that caused the trade imbalance,” Huo told the Global Times on Thursday.
Trump has made narrowing the US trade deficit with China a priority of his administration. In 2016, the US reported a $347 billion trade deficit with China. China’s trade surplus with the US for the first 10 months of the year rose to $223 billion, according to Chinese customs data released Wednesday.
China is the third export destination for US goods after Canada and Mexico, and has also been calling for the US to open more of its high-tech sectors.
“Many of the deals, like those in energy, will continue for years to come. As for high-tech exports, it can be said that partial breakthroughs have been made in the US ban on high-tech goods,” Huo said.
If the US were to relax its export barriers against China to the same level as those applied to Brazil, the US trade deficit with China would narrow by up to 24 percent, according to research published by the Carnegie Endowment for International Peace in April.