Beijing's Take on the China-U.S. Trade Relationship: It's All Good
May 25 2017 - 4:17AM
Dow Jones News
BEIJING--China's assessment of the trade relationship with the
U.S.: The imbalance isn't that bad, job losses at U.S. steel mills
aren't China's fault and Beijing's yuan interventions benefit the
U.S.
Four months into Donald Trump's presidency, China's Commerce
Ministry on Thursday issued a special report defending its trade
policies and practices in matters from market access to the
exchange rate.
Washington and Beijing earlier this month reached a deal
pledging closer cooperation in agricultural trade and financial
services, but avoided more divisive issues such as the Chinese
industrial overcapacity that has flooded global markets with cheap
steel and aluminum.
It is "untenable" for the U.S. to blame job losses on the
Chinese government's support for its steel industry, the 117-page
English version of the report said, instead citing slower global
economic growth and advances in technology.
The ministry also said the U.S. trade deficit with China in
goods has been exaggerated, in part by complications of statistical
methodologies such as calculations of reshipping.
Citing a joint study by the ministry and the U.S. Commerce
Department, the report said the trade deficit in goods had been
overstated by 19% between 2008 and 2014. The Office of the U.S.
Trade Representative put last year's goods trade deficit with China
at $347 billion, while China reported a goods trade surplus with
the U.S. of $254 billion.
But China runs a trade deficit with the U.S. on services, such
as Hollywood movies. Based on the joint study, the ministry put
last year's overall trade gap at $164.8 billion.
The report also defended China's obstacles to U.S. investment in
sectors such as banking, securities, insurance and
manufacturing.
"China believes that the level of openness of a country is
determined by national conditions and is closely related to the
political system, economic system, development level and regulatory
capacity," the report said.
As for Beijing's use of foreign-exchange reserves to steady the
yuan, the report argues that it isn't manipulation but rather
intervention "favorable to the international community, including
the U.S."
The central bank has taken steps to prevent the yuan from
depreciating too fast. President Trump has criticized China's
currency practices, though he hasn't acted on his campaign pledge
to label the country a currency manipulator.
Beijing will seek a balance between flexibility and stability
for the yuan, the ministry said, adding that it will gradually
reach a "new equilibrium" after a period of volatility. In recent
days, the yuan has closely followed the dollar's movements.
The ministry also repeated the government's vows to ease market
access and increase imports of some U.S. goods, such as
agricultural products. It called on the U.S. to ease limits on
high-tech imports and improve treatment of Chinese companies that
invest in the U.S.
After reaching their deal earlier this month--which followed an
April meeting between Mr. Trump and Chinese President Xi
Jinping--the two governments agreed to work on a one-year plan to
further tighten trade ties.
Liyan Qi
(END) Dow Jones Newswires
May 25, 2017 04:02 ET (08:02 GMT)
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