China and U.S. reached agreements on some economic and trade issues

China and the United States have reached agreements on some issues in their economic and trade consultations in Beijing this week, and have agreed to set up a mechanism for continuing dialogue, according a report by Xinhua. Although the disputes were not resolved entirely during the two-day talks, the negotiations serve as a good start for the world's two largest economies to better manage their trade and economic ties.

According to the Xinhua report, Chinese Vice Premier Liu He held candid, efficient and constructive talks with the American delegation led by President Trump's special envoy and Treasury Secretary Steven Mnuchin. The two sides had a thorough exchange of views and reached consensus on some issues regarding an increase in American exports to China, the bilateral trade in services, two-way investment, and the protection of intellectual property rights. They also made progress in resolving tariff and non-tariff issues, reaching consensus in some areas. Both sides recognize that considerable differences still exist between them, and that continued hard work is required in order to make more progress. No one seriously expected that just two days of negotiations could iron out all the differences between Beijing and Washington. But this round of talks has highlighted the importance of constructive dialogue in finding solutions to these disputes.
Both sides agree with the principle that a sound and stable China-U.S. trade relationship is crucial for both sides. And both sides are committed to resolving their economic and trade issues through dialogue and consultation. This is perhaps the most important hurdle that both sides have gotten over, as once both parties agree to work together towards a solution, what is left to solve are a series of mostly technical policy issues that can be dealt with step by step.

It is also a positive sign that the two sides have already reached consensus in some areas. In any negotiation, the most challenging part is often the beginning. If the two sides can agree to put aside some of their minor differences and find common ground, they can tackle some of the relatively easy problems first, and build their negotiations on a growing foundation of consensus.

Both sides also agreed to establish a work mechanism for ongoing discussions. This is a critical move, as this mechanism will serve as one of the main tools through which differences can be addressed. Beyond the current tensions, it may also form the basis for an ongoing mechanism that can be used to ease future tensions between the two big powers. Without such a system, the two sides could do little but shout at each other, which has the potential to lead to misunderstandings and misjudgment.

Despite the positive start, a major outstanding issue is the American demand that Beijing abandon its "Made in China 2025" initiative. This is plainly unfair. It is a move clearly targeting China's future development and naturally will be rejected by Beijing. As long as the American side refuses to shift attention from China's 2025 Initiative,  there may continue to be conflict between the two countries.

That aside, it is important to recognize that this is the first formal dialogue between the two sides since the dispute reached the point where the threats to derail bilateral trade and economic ties became a serious possibility. And so far, it has gotten off to a good start.

Source: CHINA PLUS,Xu Qinduo

(Xu Qinduo is a political analyst for CRI and CGTN, and a Senior Fellow of the Pangoal Institution. He has worked as CRI's chief correspondent to Washington DC.)