每日跟讀#491: Xi under pressure as Trump grants temporary reprieve
During a meeting last week between US President Donald Trump and Chinese President Xi Jinping, the two leaders hammered out a consensus to enable a temporary truce to the US-China trade war. At first it appeared Trump had given Xi face-saving concessions, yet in reality it was the US side that has not only gained face but also won a substantive victory. Beijing has made the greatest number of concessions, while Washington only slightly softened its stance, to give the Chinese side some breathing space. In addition, the US has given China an extension of 90 days to complete the trade negotiations: a timeframe that coincides with the Chinese Communist Party’s annual Chinese National People’s Congress and Chinese People’s Political Consultative Conference. For Beijing, this next stage in the negotiations is fraught with danger, especially since the country’s domestic economic problems are beginning to rise to the surface. It is therefore Xi who is under the greatest amount of pressure to strike a deal.
Since the US-China trade war kicked off, the US has placed customs tariffs on Chinese products worth US$250 billion, accounting for approximately half of China’s exports to the US. Beijing has retaliated by imposing tariffs on US$110 billion worth of US products. However, the Chinese economy has clearly sustained a greater blow. The country is facing a raft of problems including an economic slowdown, credit defaults, sluggish consumer spending and a housing bubble. If the trade war continues to escalate, production lines will rapidly withdraw from China, and this could unleash a wave of redundancies. This would strike a hammer blow to China’s economy and society, and would also pose a serious challenge to Xi’s leadership.
Despite the progress made at last week’s meeting, judging from the briefings given by either side after the event, it is clear that there are still a number of unresolved differences. While the US agreed to defer raising tariffs to 25 percent on US$200 billion of Chinese goods — and China in turn agreed to expand its purchases of US goods — there remains a 90-day deadline for the completion of negotiations, while a number of other issues were left unresolved. This includes implementation of structural reforms including protection of intellectual property rights, expanding purchases of [US] goods and individual cases such as the acquisition of NXP by Qualcomm. The two sides agreed to disagree on these and other areas, thereby foreshadowing a rekindling of the trade war in the near future.
From Trump’s perspective, due to the current strong recovery of the US economy, agreeing to defer the further raising of tariffs in exchange for Chinese promises to expand purchases of American goods and opening up its markets seems like an effective opening gambit. However, future negotiations will be tempered by the hawkish, anti-China sentiment in Washington.
From Xi’s perspective, the trade war is already hurting China’s economy, and although a temporary respite has been granted, the challenge for Xi is how to respond to US demands to implement structural reform, in addition to seeing off a growing restlessness and opposition to his policies at home. It seems that the US-China trade war is a fire that will prove difficult to extinguish.
(自由時報記者鄭琪芳)(Translated by Edward Jones, Taipei Times)
Source article: http://www.taipeitimes.com/News/lang/archives/2018/12/11/2003705865/2