Free Trial

MNI POLICY: Unclear Goals Hurt U.S.-China Talks: He Jianxiong

Results So Far Are Failure And Compromise Is Needed
By Brooke Migdon
     WASHINGTON (MNI) - Unclear strategy and policy goals are feeding mistrust
between Chinese and American leaders negotiating a phase one trade agreement, a
former Chinese government official said Wednesday.
     "The signals have been very confusing," former IMF Executive Director for
China He Jianxiong said at a conference at the Peterson Institute for
International Economics. The current approach has "failed to yield results."
     China must state the "do-ables and un-do-ables" of an agreement to
facilitate a material compromise, he said at a conference in Washington. The
unpredictability of President Donald Trump's White House adds an additional
layer of complexity.
     China's agenda of "opening up" the economy is conditional on U.S. actions,
but the lack of guarantees the U.S. will deliver its promises brings significant
political risks for Chinese leader Xi Jinping, according to He. 
     "It may be perceived as the Chinese government yielding to U.S. pressure
and it would be difficult for officials to market those reforms," he said,
noting a rise in nationalism.
     China has resisted legislative overhaul before. Prior to the most recent
October trade talks which yielded promises of a preliminary agreement, China
returned a heavily-edited 150-page draft trade agreement to Washington in May.
The changes deleted prior commitments to alter its laws to address alleged theft
of intellectual property, forced technology transfers and currency manipulation.
     Recent promises to increase China's interaction with the rest of the world
has been "encouraging," according to He. China's Xi said during a speech in
Shanghai Tuesday that China would "open its doors only wider to the world."
     U.S. signals about a desire to "decouple" the two economies is a
"dangerous" phenomenon, according to He. The issue lingers even after Vice
President Mike Pence gave a speech last month saying that isn't the
administration's intent. 
     "The magnitude of the impact is not the key, but the psychological impact
arising from uncertainty," He said. "If the market or investors perceive the
government's intent as decoupling going forward, then they could be very
hesitant to send their dollars."
--MNI Washington Bureau; +1 202 371 2121; email:
[TOPICS: M$U$$$,MC$$$$,MI$$$$,MT$$$$,MGU$$$]

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.