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China And The United States Reached Consensus On Economic And Trade Issues

Dec 06, 2018

On the evening of December 1, local time, Chinese President xi jinping was invited to have dinner and meet with US President Donald trump in Buenos Aires.

Later, state councilor and foreign minister wang yi held a press conference in Buenos Aires on the just-concluded china-us summit.

Wang said the discussions on economic and trade issues between the two sides have been very positive and constructive.

The two heads of state agreed to stop imposing new tariffs on each other.

The two sides have put forward a series of constructive proposals on how to properly resolve existing differences and problems.

China is ready to expand imports according to the needs of its domestic market and people, including the purchase of marketable goods from the United States, so as to gradually ease the trade imbalance.

The two sides agreed to open up their markets to each other and gradually address legitimate concerns of the United States in China's new round of reform and opening-up.

The working teams of the two sides will, in accordance with the principled consensus reached by the heads of state of the two countries, step up consultations towards the elimination of all tariff increases and reach a mutually beneficial and win-win agreement at an early date.

Both sides believe that the above principled consensus is of great significance. It not only effectively prevents the further expansion of economic and trade frictions, but also opens up new prospects for win-win cooperation between the two sides.

It is not only conducive to the development of China and the United States and the well-being of their people, but also conducive to the steady growth of the world economy and serves the interests of all countries.

Facts have proved that the common interests between China and the United States outweigh differences and the need for cooperation exceeds friction.

As long as the two sides follow the spirit of mutual respect, accommodate each other's concerns and engage in serious dialogue on an equal footing, a win-win solution can be found.

Since march this year, the us has implemented 50 billion tax increases on China and 200 billion tax increases in September, covering machinery and equipment, electronics, automobiles, textiles, fruits and daily necessities.

China's countervailing list of $50bn and $60bn in us tax increases covers almost all imports from the us.

This trade confrontation will have a big impact on both countries. From the us side, trade friction has cast a shadow over the us economy and stock market.

From the Chinese side, in the textile industry, for example, since the second quarter of 2018, textile enterprises has entered a period of weak demand, although the United States on China's textile after taxes, such as home textile products, clothes, but for the raw material, yarn and fabric taxes brought uncertainties to the market, overseas orders in a state of drift.

According to the upstream spinning enterprises, since the introduction of the tax increase list in the United States, enterprises have been surrounded by various concerns and stopped the procurement and customs clearance of American cotton. On the one hand, the continuity and stability of production have been affected, and on the other hand, a large amount of capital has been occupied.

Some apparel makers are already feeling the effects of trade frictions, including the loss of some overseas orders.

Previously, in order to minimize losses, many orders "grab export".

The fear of uncertainty about the future direction has both orderers and suppliers keeping a wait-and-see attitude towards the products after $200 billion, delaying orders and making it difficult to arrange production for next year.

Many companies worry that American orders will no longer be diverted to the Chinese market and to southeast Asian countries.

Companies that export exclusively to the United States, in particular, fear "extinction."

It should be said that December 1 is a new start, and will be a good signal for domestic industries to pick up energy and confidence.

In fact, while trade frictions between China and the United States have been escalating, China has been pushing ahead with its opening up and lowering tariffs four times a year.

In the first Shanghai into the expo, also fully reflects China's determination to open up and the charm of the market.

However, we should also note that although the two heads of state have reached an agreement to stop imposing new tariffs, they have not cancelled the previous tariffs imposed by each other, and the suspension of the new tariffs has a three-month period.

So this means a truce, not a final war, between trade and China.

The Chinese side stated that the economic and trade teams of the two sides will step up consultation on the elimination of tariffs imposed since the beginning of this year, so as to push bilateral economic and trade relations back to the normal track as soon as possible and achieve win-win results.

But the us statement was also clear: the us tariff on $200bn of Chinese goods will remain at 10 per cent after January 1, instead of 25 per cent as previously announced.

The two sides will begin negotiations within 90 days, and if no agreement is reached by then, the 10 percent tariff will be raised.

To this, economist, chief strategy officer qiu xiaohua of sunshine capital management thinks, above all, the winter of the market has not ended, we still can face "climb a slope to cross a ridge" all sorts of perplexities that encounter, and the difficulty that external change brings about, double challenge still is continuance.

Therefore, entrepreneurs should see that the current difficult period of China's economy is not over yet, so they should not be blindly optimistic and continue to prepare for the winter.

Secondly, the spring of policy, reform and opening up is coming to us.

If the atmosphere this spring becomes more and more intense, it may dilute the severity of the market, activate the vitality of the market, and release the potential of the market.

From this perspective, the first half of next year is likely to be a difficult period, and the second half of next year may ease up a little bit.

'from a macro perspective, the trade dispute between the two countries has been temporarily eased,' said yan zhi, chairman of drow holdings. 'in the long run, our country will actively strive for a complete solution to the problem, which is a great good for private enterprises.'

Today's consensus is a ray of light that the future will get better and better.