The 1-year US-China trade agreement looks back: Commitments are far from reality

The 1-year US-China trade agreement looks back: Commitments are far from reality

One year after the signing of the agreement, the value of Chinese goods imported from the United States was far less than Beijing’s commitment, the imbalance in the trade balance was widened.

Container cargo ship docked at deep water port in Shanghai. Photo: Getty Images

On January 15, 2020, the US and China officially signed a phase 1 trade agreement after many rounds of tense negotiations, creating a “ceasefire” for the trade war between the two major economies. the world that President Donald Trump’s administration initiated in July 2018.

Under the agreement, Washington agreed to cut some tariff lines, in return Beijing pledged to increase US $ 200 billion in imports of goods from the US in 2020 and 2021, with the comparative milestone of total merchandise imports. from the US of China in 2017. Particularly for 2020, according to the set agreement, Beijing must increase the amount of additional goods purchased from the US by at least over 63.9 billion USD compared to the threshold of 2017.

The document also mentions a number of provisions that regulate Beijing to end intellectual property theft, stop forced technology transfers, and further open the domestic market to the US financial services industry.

Exactly 1 year after the signing, it is not possible to confirm that the first phase trade agreement is successful, when the value of Chinese goods imported from the US is far below the commitment, while the trade surplus of China before America also increased.

Analysts say the only positive point is that the agreement opens the foundation for the two sides to engage on economic and trade topics, an important step to reshape the bilateral relationship in the context. both sides lose trust in each other. As for the specific number, this agreement is considered a failure.

According to statistics of the Peterson Institute for International Economics (USA), by the end of November 2020, the amount of Chinese goods purchased from the US is only less than 60% of the commitment of 2020. Calculated according to sea data In China, imports of goods from the US from the US reached 86.9 billion USD, compared with 153.8 billion USD as committed. According to US data, exports from the US to China during this period was 82.3 billion USD, far below the target of 141.7 billion USD.

Even the sector with the strongest step forward is agricultural product imports, which only reached 76% or 62% of commitments, depending on whether US or Chinese statistics are used. As for energy products, China’s buying value stopped at 7.8 billion USD compared to the target of 21.8 billion USD, only 35% of the plan.

The imbalance in the bilateral trade balance, meanwhile, widens. For the whole year 2020, China’s trade surplus before the US reached $ 316.9 billion, up 7.1% from last year and the year with the second highest record surplus, just below $ 324 billion of year 2018.

In terms of intellectual property and market opening, in September 2020, the Beijing government announced a draft law on enhancing the protection of rights for owners of trade secrets, applicable to both individuals. , Foreign organization. The People’s Bank of China in June 2020 also licensed America Express Financial Group (USA) to conduct payment operations in China, the first foreign entity to enjoy this status.

However, with companies operating in China expecting significant structural changes in the business environment and improvements in market access for technology products, Beijing’s subsidy reduction for For the state sector, the first stage trade agreement has not created any big change in the business and investment environment in the mainland.

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