MNI INTERVIEW: U.S.-China Need Financial Talks Restart-Advisor

China and the U.S. need to move faster on financial and trade talks even when they agree to disagree, a senior advisor to the Chinese government and founder of the Center for China and Globalization told MNI in an interview.

There is a growing risk of a "double-edged sword" of national security concerns fuelling continued tit-for-tat crackdowns by the U.S. and China in trade and business ties that will just end up hurting global economic recovery efforts, said Wang Huiyao, a counselor for China's State Council and president of the Beijing-based think tank CCG.

See: MNI INTERVIEW: Former China Trade Minister Doubts A Trade Deal Ahead

A list of current points of economic friction would be long. But recently the focus has been on U.S. regulations on IPOs that seek Chinese companies to disclose the risk of Beijing interfering in their businesses, with China also worried over about U.S. restrictions on Chinese companies, with recent regulatory actions in China in focus for markets, MNI: China Regulators To Show Caution, Not End Crackdowns.

Instead of tussles over tech to geopolitics and the virus, both countries should find common ground in areas like climate change, the digital economy and infrastructure and so on, Wang said.

He warned that tracing the origin of the coronavirus to a lab leak in China is an "unpractical idea" which would undermine efforts of fixing the bilateral relations.

"The urgent task now is making all countries fight against the pandemic and deal with the travel ban via pushing the vaccine passport or certification since the world has to live with the virus for a long time," he said.

The Beijing Winter Olympic Games, slated to open in February 2022, would be a chance for China to open its border by drawing on the lessons learned at the Tokyo Summer Olympic Games, Wang said.

WHEN IN ROME

Restarting talks between high-ranking economic officials, or even a face-to-face summit between Xi Jinping and Joe Biden at the G-20 Rome Summit this October, would help as would a restart of talks on a China-EU investment deal which was suspended in May by the European Commission due to tensions between Brussels and Beijing.

"China is always open-minded to talks, such as about the WTO reform at its Ministerial Conference in November, and the participation in a Comprehensive Progressive Trans-Pacific Partnership and even a phase two deal depending on the U.S.' attitude," he said.

INFRASTRUCTURE

Wang, a seasoned international affairs expert, said infrastructure investment would be an area of focus along with climate change to get the economic relationship on a less tense track.

He suggested that Asian Infrastructure Investment Bank, initiated by China and having over 100 members including five out of the G7, could include the U.S. and become a "global infrastructure investment bank".

He noted Beijing's close link with the Obama administration in infrastructure, which could set a successful model.

GREENSHOOTS

In a sign Beijing and Washington can move forward, Wang noted that visas for Chinese students headed to American universities are back in play.

Visa numbers for Chinese students are expected to reach 200,000 this summer even with a refusal rate of about 3%.

As well, China has broadly accepted a proposed international minimum corporate tax pushed by U.S. Treasury Secretary Janet Yellen.

Still, even with a new envoy to Washington, Qin Gang, delivering positive signals from Beijing, Wang said that a that the turning point in the relationship needs to be seen in a "longer horizon, maybe to 2035".