Trade war: China’s US imports under phase one deal not ‘one-sided obligation’, Chinese scholars say

• China agreed to buy additional US$200 billion worth of American goods and services over the next two years as part of the deal signed in Washington last week
• Scepticism remains over whether China can deliver the promised purchases as the ‘framework is based on the principles of the market economy’

The United States must supply the right products at the right prices to make it possible for China to honour its commitment under last week's trade deal, a group of Chinese scholars said on Monday.

As part of the phase one trade deal signed in Washington last week, China agreed to buy an additional US$200 billion worth of American goods and services over the next two years, including US$32 billion worth of agricultural products.

But scepticism remains over whether China can deliver the promised purchases as it would translate into a significant increase from a base of just US$19.6 billion worth of agricultural purchases in 2017.

"First of all, we will do our best (to increase purchases); but the second point is that the US must provide good products at competitive prices," said former vice-commerce minister Wei Jianguo, adding that China's promised purchases of US farm goods is not a "one-sided obligation".

We will do our best (to increase purchases); but the second point is that the US must provide good products at competitive pricesWei Jianguo

Wei, who was speaking at a seminar hosted by the China Centre for International Economic Exchanges (CCIEE), a state think-tank, added that the Chinese government cannot force its importers to buy US products and that American firms have to compete for orders against the market.

According to the published text of the agreement, China and the US "acknowledge that purchases will be made at market prices based on commercial considerations and that market conditions, particularly in the case of agricultural goods, may dictate the timing of purchases within any given year".

The deal also stipulates that "if China believes that its ability to fulfil its obligations … is being affected by an action or inaction by the United States or by other circumstances arising in the United States, China is entitled to request consultations with the United States".

"The agreement is just a kind of framework," said Zhang Xiaoqiang, a former vice-chairman at the National Development of Reform Commission (NDRC), who is now executive vice-chairman at the CCIEE.

"You cannot take the chance to raise prices arbitrarily or sell inferior quality products to China " that would certainly not be acceptable for local companies and consumers.

"The framework is based on the principles of the market economy."

You cannot take the chance to raise prices arbitrarily or sell inferior quality products to China " that would certainly not be acceptable for local companies and consumersZhang Xiaoqiang

China lifted an import ban on US beef in 2017 after President Xi Jinping met with US President Donald Trump, ending a 14-year-long embargo due to mad cow disease, although they are struggling to compete with Australia and Latin American products that are more competitively priced.

"It's not that you can simply get the market as you wish after signing the deal," said Fang Yan, a former deputy director of the NDRC's rural economy department.

"We've been importing American pork for a while, but they're not sold very well … mainly because there were too expensive."

According to Fang, as part of the phase one deal, China should address its weak links in agricultural infrastructure, technology and management as it remains a very difficult task to ensure food security having lost its competitive advantages against the US in profitability and price of all four major grains including corn, wheat, rice and soybeans.

Former vice-commerce minister Wei also warned China against excluding other trading partners while trying to keep its promises to the US.

"We cannot exclude Brazil or Argentina (in farm products trade) or cut energy trade with the Middle East merely because we've promised to import more from the US," Wei added.

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