Beijing: China and the United States announced more than $250 billion (Dh918 billion) in business deals during US President Donald Trump’s state visit to Beijing on Thursday.
The deals range from billions in Chinese soybean and aircraft imports to major projects like the development and export of liquefied natural gas from Alaska.
One of the most substantive agreements was a gas deal between the state of Alaska, Alaska Gasline Development Corp, China Petrochemical Corp (Sinopec), China Investment Corporation (CIC) and the Bank of China, involving a total investment of up to $43 billion. China’s signing of a $37 billion agreement to buy 300 aircraft — single-aisle and twin-aisle — from US aerospace giant Boeing followed closely.
The signing of more than a dozen deals did little to quiet Trump’s complaints about China’s “unfair” trade practices.
President Xi Jinping acknowledged there has been some “friction” in the trade relationship and called for more US companies to participate in China’s signature Belt and Road Initiative, a massive global trade infrastructure programme.
“To keep opening up is our long term strategy. We will not narrow or close our doors. We will open them wider and wider,” Xi told an audience of business executives.
After the signing ceremony, China’s commerce minister Zhong Shan praised the deals as “truly a miracle, not just in the history of US-China relations, but in the history of the whole world”.
Big deals will do little
Some analysts, however, say any large deals will do little to shift the overall balance of trade unless the structural barriers preventing US businesses from competing fairly in China are changed.
The gas deal between the state of Alaska, Alaska Gasline Development Corp, China Petrochemical Corp (Sinopec), China Investment Corporation (CIC) and the Bank of China involves a total investment of up to $43 billion.
Official said the joint development agreement will create up to 12,000 American jobs and reduce the trade deficit between the United States and Asia by $10 billion annually.
In turn, it will provide China with clean and affordable energy.
Many were little more than nonbinding memorandums of understanding, which can take years to materialise, or can simply fall apart.
“It’s old-style politics, where a leader comes in and you scoop a bunch of deals which were already under way, or you put out a big number to show the relationship is strong,” said James McGregor, China chairman of the consultancy APCO Worldwide.
Even as his administration was trumpeting the quarter of a trillion dollar headline figure, Trump returned to his familiar refrain that trade relations were “very one-sided and unfair.”
“I don’t blame China,” Trump said to awkward applause and nervous laughter from executives gathered for the signing ceremony at the cavernous Great Hall of the People. “After all, who can blame a country for being able to take advantage of another country for the benefit of its citizens?” he added.
Instead, Trump pointed the finger at past US administrations “for allowing this out-of-control trade deficit to take place and to grow”.
Christopher Balding, economics professor at Peking University, said the agreements announced on Thursday were “standard operating procedure-type deals”.
“We haven’t seen any agreements on market access or market opening in either investment or trade. Those are really the bigger issues American companies are concerned about, rather than one-off deals,” he said.
Some friction
The Trump administration has aggressively pursued trade remedies in commercial relations with Beijing — investigating Chinese trade practices on intellectual property and in aluminium and steel.
Speaking after talks with Xi, Trump said China had to “immediately” take greater action on market access, forced technology transfers and theft of intellectual property. “We have to fix this because it just doesn’t work for our great American companies, and it doesn’t work for our great American workers,” he said.
Xi admitted that “there has been some friction on bilateral trade”. But he told Trump that opening China’s economy was the country’s long-term strategy.
“We will not narrow or close our doors. We will open wider and wider,” Xi said.
