– This is the script of CNBC's news report for China's CCTV on July 20, Thursday.
Trade talks between U.S and Chinese officials have concluded, however, last night it was announced that the scheduled news conference was cancelled, causing even more people to anticipate what could possibly be the outcome between U.S and China's trade relations.
Let's take a closer look at some of the several stances that have emerged since last night with the first one being U.S seeking to ease U.S-China's trade imbalance, in hopes of making it more equal.
According to Wilbur Ross, the United States Secretary of Commerce, there is indeed some progress that came out of the 100 days trade talk, such as the return of U.S beef to China. He considered these small gains as a good start. Yet, at the same time, Ross also expressed that there exists a serious trade imbalance between U.S and China that needs to be dealt with.
According to National Bureau of Statistics in 2016, the U.S. trade deficit with China stood at $347 billion which accounted for 47% of the total goods trade deficit. However, in a report by China's Ministry of Commerce, the 2016's trade deficit was actually at $254 billion. It also cited that the American's figures were exaggerated.
At the same time, the report also emphasized that in terms of service trade with China in 2016, the U.S. had a surplus that reached 55.7 billion dollars As such, what we see here is that there are clear differences between the statistics coming from America and China. Despite these differences, one thing that we can be sure of is that both countries reported data that recorded a decline from 2015's and this downward trend has continued since the start of this year. For example, the data from the U.S Chamber of Commerce in February showed that US trade deficit with China went down by 26% but its China's exports went up by 22%.
Besides, another point of discussion is the mutual opening up of various markets. Currently, China is the biggest US importer of aircraft and soybean and also the second biggest for cars, electronic integrated circuits and cotton. Here are some data. 62% of the total American soybean exports and 17% of American car exports are going into China. Furthermore, 15% of the total electronic integrated circuits, 14% of total American cotton and 25% of the total number of American speakers are also going into China.
However, China's imports of high-tech products from the U.S only make up 8.2% of China's total imports of similar products. Therefore, China does hope that there can be deeper discussion with regards to import products like aeroplanes, cotton, electronic beds and other high-tech products. Furthermore, stronger cooperation can be achieved between China and America in areas like energy, beef and agricultural products, manufacturing, films, tourism and even student exchange programs.
Looking forwards, analysts have expressed that discussion between the U.S and China is set to continue in the second half of this year and an important thing to be noted is impending tariff measures that are going to be imposed, especially on steel imports. Recently, Trump had expressed information on limitations and tariffs of steel imports will soon be unveiled. Last night, he once also expressed that tariffs on steel imports could happen and this might result in some uncertainty in the relations between U.S and China.
[Nicholas Consonery, Senior Director&Head of Asia Political Risk, FTI Consulting] "The question is whats coming next. There is a sense that the two sides are going to agree to some kind of one year framework for further negotiations about trade. It is very clear that the Trump administration is looking to push over-capacity industries including steel, so I think we will see more trade tensions in the second half, manageable but more tension."