Wang Yiming: Hope, But Not Haste

Jan 27 , 2021

Wang Yiming, Former Vice President (Vice Minister) of Development Research Center of the State Council, P. R. China


The fact that a new administration has taken office in the United States may be welcome news in terms of improving China-U.S. economic and trade relations. It also makes our dialogue today more meaningful. For the time being, the new administration gives priority to domestic issues, such as pandemic control, economic revival and the healing of divisions; consequently, it has little energy to spare on repairing relations with China. We can hardly expect the new administration to substantially reverse the previous administration’s policy toward China because — as a result of certain domestic factors — it doesn’t want to be seen as soft on China. But the arrival of the new administration still gives us hope as we try to improve China-U.S. relations.

The Trump administration provoked the trade war with China and politicized bilateral trade issues, but the issues on its agenda were not addressed by the war as expected — including its huge trade deficit and hindrance of China’s technological progress. The trade war hasn’t significantly reduced the U.S. trade deficit with China; in fact, the figure has increased. In addition to dealing a blow to Chinese high-tech firms, restrictions on U.S. technology exports have undermined the interests of U.S. high-tech companies. Facts prove that a trade war is not an effective solution to trade issues.

The rebuilding of China-U.S. economic and trade relations must be based on a sound positioning of bilateral relations. While the U.S. sees China as its strategic competitor, the two countries are not each other’s enemy. Their competition should be manageable as long as they respect each other’s core interests and don’t challenge each other’s red lines. Their competition should also be fair, equitable and based on rules. Competition does not mean that there is no room for cooperation; instead, they need to pursue cooperation through communication and dialogue, which will place their competition on a sound footing.

At present, China and the United States need to work together on the most urgent issues to restore and rebuild the trust that bilateral cooperation demands.

First, boosting pandemic control.

When Ebola broke out in West Africa in 2014, both the United States and China dispatched medical teams and provided medical supplies to the region — which means that they can also work together on pandemic control today. They can cooperate within the framework of the World Health Organization and enhance coordination on global vaccine distribution. This is critical to their efforts to rebuild trust.

Second, addressing climate change.

Cooperation of the two countries in 2015 paved the way for the signing of the Paris agreement. President Biden has signed an executive order to rejoin the agreement, and President Xi Jinping has announced that China aims to reach peak carbon dioxide emissions by 2030 and carbon neutrality by 2060. Therefore, there is tremendous room for cooperation in addressing climate change.

Third, placing China-U.S. trade on the right track.

In light of the impact of the pandemic, the two countries can establish a grace period through consultations on implementing the phase one trade agreement and at the same time start to remove extra tariffs imposed on each other. Based on the assessment of the phase one agreement, they can launch a new round of negotiations on deeper structural issues. And these negotiations can be combined with efforts to resume negotiations on a bilateral investment treaty.

Fourth, strengthening macroeconomic policy coordination.

Through policy coordination and cooperation, China and the United States played an important role in helping the global economy out of the 2008 international financial crisis. At present, because of the impact of the coronavirus pandemic, global economic recovery faces many uncertainties. In response, China and the United States can carry out dialogues and coordination within the G20 framework and work together to boost global economic recovery and stabilize global industrial and supply chains and the global financial system.

In the final analysis, compared with the past four years, complex competition and rivalry between China and the United States are still unavoidable today, and the improvement of their economic and trade relations remains an uphill battle. However, we have good reasons to believe that as long as both sides stand ready to work together, they can build more stable and constructive economic and trade ties for the benefit of both peoples.