Beijing and Washington are close to signing a mutually beneficial agreement, experts say. As CNBC strategist Michael Ivanovitch thinks, China’s government will still run large trade surpluses with the US. Moreover, the analyst is sure that China will never accept Washington-proposed reforms of its trade and industry.
Notably, there are three key reforms the US wants China to implement: the protection of intellectual property, the outlawing of forced technology transfers, and the cessation of industry subsidies. On the other hand, China denies any of those violations as it does not consider them to be violations at all. According to Mr. Ivanovitch, such a stance leads negotiations to a dead end. Previously, Chinese President Xi Jinping announced that the trade talks with the US would continue in Washington. He expressed hope that the parties would come to a mutually beneficial agreement.
“China would make its industry subsidies compliant with the relevant rules of the World Trade Organization, but it is not willing to discuss that with Washington. Beijing rejects the coercion of an American trade "enforcement mechanism," CNBC expert said.
“Washington finds that unacceptable because it wants to keep the "enforcement control" as a trigger for trade tariffs in case it determines that China violated agreed-upon industry subsidy rules,” he added.
Ivanovitch is sure that “there is no way that China's core leader would have agreed to US-imposed structural reforms and American enforcement mechanisms that would serve as triggers for trade tariffs at Washington's discretion.” The American government has to consider the stance of China’s leader and build further relations based on the current situation, CNBC expert believes.
