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MNI INTERVIEW: U.S.-China Trade Deal Chances Slim: Chen Deming

Former commerce minister Chen Deming says a U.S.-China Phase Two trade deal is highly unlikely.

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China and the U.S. are unlikely to agree a Phase Two trade deal as there has been no reset of relations between Beijing and Washington under the Biden administration, a former senior official told MNI in an interview.

"I have no big hope that China and the U.S. relationship could make a big breakthrough during Biden's (four-year) term," former Commerce Minister Chen Deming told MNI on the sidelines of an annual conference hosted by the Center for China and Globalization a Beijing-based think tank.

He said the Biden administration is, by and large, continuing with the policies of the former Trump administration.

China has hopes for exports in the second half of this year, MNI reported in July, MNI: Rising Global Trade To Buoy China H2 Exports.

A ROUGH START

Bilateral talks earlier this year in Alaska and recent in Tianjin ended far from satisfactorily, Chen said, as the U.S. was not prepared to accept China's proposed bottom lines.

Washington is looking to "shake with one hand and fight with the other", which is "unacceptable" to Chinese officials, said Chen, who also serves as CCG's honorary chairman.

And bilateral relations could not be improved in such circumstances, he said, using pressure from Washington to boycott cotton grown in the Uyghur-majority Xinjiang region of China as one example.

PHASE ONE WINDING DOWN

The Phase One trade deal negotiated with the Trump administration is due to expire at the end of 2021 and there is much speculation as to whether a second agreement can be reached.

Among the outstanding issues include economic structural and state-owned company changes Washington says are needed for a level-playing field.

For Chen, chances appear slim, but he does not rule out the possibility of a negotiated deal as the two economies are highly complementary.

See: MNI INTERVIEW: U.S.-China Economic Restart ASAP-Advisor

On the bright side, Chen hopes the new director-general of the WTO will help shift the needle and progress can be made at a ministerial conference in November.

China would look for any WTO reform to be built on fairness and justice, although current rules should be abided by before making new ones, Chen said.

He underlined that Beijing would ensure its "status of a developing country will not be changed," while pushing forward WTO reforms.