The US-China trade negotiations are set for next week. However, its progress is not certain, as it may get even more intense. The group of corporate executives, academics and politicians who came this week from Beijing to discuss the state of the economy, because they are very doubtful of the outcome of the trade war, which might continue to 2020. This is because the first part of the agreement promised by Donald Trump in October has not yet been achieved.
However, the US law makers passed a bill on Thursday which is in support of pro-democracy campaigners in the city of Hong Kong, where protests have gone on for months. China has criticized the legislation which has now been taking to Trump for approval. If it becomes law, Washington could eventually withdraw Hong Kong’s special trade status if it discover that Beijing isn’t maintaining the city’s freedoms.,”
The former US Secretary of State Henry Kissinger said on a stage in Beijing that, the United States and China are “in the foothills of a Cold War,” and that if conflicts are not resolved it might lead to problems that will be “even worse” than the past World War. The Chinese Vice President Wang Qishan quickly jumped in with a finer tone saying they should abandon the ”cold war mentality”. Anja Manuel, a partner at international consulting firm RiceHadleyGates, told CNN that, “When I look at the substance of that phase one deal, it looks like we’re just climbing out of a hole we dug ourselves.” She also added that, Agreements to roll back some tariffs and resume trade in some agricultural products don’t move the needle…they just solve a problem “we created ourselves.” And Without any meaningful progress, corporations will likely just “hunker down” and invest less, Manuel added.
And even if the United States and China manage to agree on some trade deals, other big problems might still occur according to some experts at the Beijing event. An example of such problems could be how to ensure fair competition in massive technological advances, such artificial intelligence and 5G.
Never the less, Many leaders also tried not to portray that they were taking sides between the two parties. Barshefsky said on CNN Business that the relationship between the world’s top two economies will remain fraught regardless of whether a trade deal comes to fruition or not. “The degree of friction will increase overtime, as the US and China increasingly compete head to head,” she said.
This will make things difficult for all companies that rely on doing business with China for a cheap labour. Foreign firms are already face plenty of challenges. Barshefsky said on CNN Business, “This is a complicated topic because on the one hand, it is understandable that China as all countries wants to maintain and have people express a particular image and view that is favorable,” ,,,”Certainly the United States does this. All countries around the world do this. But when it comes to the issue of retribution, this is quite unique and unusual and of concern.”