Trade frictions between the US and China might not ease in the near term even if Joe Biden becomes president, former Chinese minister of finance Lou Jiwei (樓繼偉) said yesterday.
Lou, who is now retired and serves as a member of a consultative body to the Chinese National People’s Congress, made the remarks during the Caixin Summit in Beijing.
Stocks in China and other parts of Asia rose on Monday on news that US president-elect Joe Biden had clinched enough votes to assume office in the White House, which investors hoped could lead to a thaw in frosty US-China ties. However, US President Donald Trump has not yet conceded.
When asked about the outlook for US-China economic and trade relations, the outspoken Lou said: “Even if Biden is elected, the US suppression of China will be inevitable.”
Lou called for pragmatism in US-China trade relations, saying that it was difficult for Washington to cut its trade deficit, given the US dollar’s position as the dominant global currency.
“After four years, the trade deficit [with China] is still widening. We need to return to common sense and return to science. Everyone needs to be reasonable,” Lou said.
Trump launched the trade dispute in 2018, demanding that China undertake sweeping structural reforms to open its markets and buy more from the US.
Since then, both countries have imposed tariffs affecting billions of US dollars worth of goods, causing a severe shock to the global supply chains.
Lou said he would be cautiously optimistic about trade relations if Trump were to remain in office.
Trump has called for change in how the WTO designates developing countries, complaining that nations such as China have taken unfair advantage of their status as developing economies under WTO rules that allow them to maintain higher tariffs and other trade barriers.
The Geneva-based body is currently seeking to find its next director-general after Brazil’s Roberto Azevedo in August stepped down a year early.
EU Ambassador to China Nicolas Chapuis urged a reform of multinational organizations, especially the WTO, with globalization facing a crisis.
China also needs to play a bigger role and advance from its current WTO status as a developing nation, Chapuis said at the Caixin Summit.
“China in WTO today is not the China in WTO in 2001,” Chapuis said. “We expect China to come up with ideas, suggestions, and that we overcome the present obstacles of China defining itself as a developing country.”
In February, the Trump administration removed some countries including China from a US list of developing nations, making it easier for Washington to investigate whether those nations are unfairly subsidizing exports.
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