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Editor's Note: Meng Weizhan is an Assistant Research Professor at China Institute, Fudan University. The article reflects the author's views, and not necessarily those of CGTN.
If no deal is reached, U.S. President Donald Trump has stipulated March 2 as the date the U.S. will increase tariffs on 200 billion U.S. dollars worth of Chinese goods. By that time Liu He, China's vice premier, will have visited Washington to meet Robert Lighthizer, the U.S. trade representative, along with other American officials.
In December 2018, Trump stated via Twitter messages that China really wanted to reach an agreement with the U.S. He appears to be very optimistic about the negotiations. Indeed, China has dropped retaliatory measures on American-made cars and resumed purchasing American soybeans. It has also reduced tariffs on more than 700 categories of goods from around the world.
However, there is currently no indication that China has met the basic requirements set by the U.S., and it is impossible for China to make concessions to the extent that the U.S. is truly satisfied. The U.S. is demanding deep structural changes to Chinese economic policies on everything from the plundering of American intellectual property to discrimination against U.S. companies and Beijing's rampant subsidization of certain industries.
Liu He was once considered one of the representative figures of a liberal economist in the Chinese government. When he assumed the position of the director of the Office of the Leading Group for Financial and Economic Affairs in 2013, Chinese media and a number of scholars criticized him and believed he would lead the Chinese economy down the wrong path. If he cannot satisfy the U.S.'s demands, the possibility of an agreement between China and the U.S. will be minimal.
Trump is correct in stating that China is now very keen on reaching an agreement with the U.S. to ease economic pressure. Albeit, Chinese leadership is convinced that once it effectively gives up on its economic model, China will face enormous risks that could possibly lead to disorder within the country. Perhaps Americans believe that a liberal economic system is the safest, but, in the eyes of the Chinese, China would rather choose to be sanctioned by the U.S. than be willing to change its economic model.
Chinese leadership believes in Marxist economics which argues that the capitalist system cannot avoid a cyclical economic crisis. Moreover, the fact that the Western world was hit by an economic crisis in 2008 is still a critical factor.
At that time, several senior U.S. officials came to China to seek help. Moreover, many economists in the United States have recently warned that a new wave of economic crises is likely to come soon. This further convinces Chinese leadership that it is absolutely impossible to agree to the requirements of the U.S.
Nevertheless, I still believe that Liu He's upcoming visit may lead to an unexpected breakthrough in the negotiations although it is difficult to predict where the breakthroughs may occur. This is because, at the end of 2018, Graham Allison, director of the Harvard Kennedy School's Belfer Center for Science and International Affairs, was invited to visit Zhongnanhai. He then posted on Twitter that Chinese leadership told him China is prepared to make some concessions to attain opportunities for China's development. Allison was highly received in China. His message should be reliable.
It should be noted that this concession is strategic and fundamentally different from the concessions advocated by liberal scholars in China. Trump and China have reached certain agreements because now the two countries are currently facing economic difficulties. But the agreement is unlikely to satisfy the U.S. because in a few years, it may still find an excuse to say "Chinese people have deceived the U.S." and "Chinese people are not complying with the agreement."
Regardless, Trump cannot compel Beijing to move in the direction he wants. However, he has a solution for this. If the U.S. takes care of Beijing's security concerns, then Beijing will not feel very invisible; thus, it would likely sacrifice some of its own economic interests.
In particular, the U.S. should repeal the Taiwan Travel Act and the Reciprocal Access to Tibet Act because these two acts have led many Chinese to believe that U.S. policy towards China now aims to contain China's development and even prevent China's reunification.
Therefore, they argue, China should not make concessions to the United States. In addition, the U.S. should drop its efforts to extradite the chief financial officer of Chinese telecommunications company Huawei. If Trump proceeds in this manner, the Chinese will then consider the U.S. trustworthy.
Currently, Trump is under pressure, and the window for him to use market-rattling tariffs as leverage is liable to shrink as his re-election campaign heats up next year.
Furthermore, the majority of politicians and scholars in China currently hold a strong disregard for the U.S. To amend this, the U.S. should make more of an effort to allow the Chinese to believe that its only intentions are to change China's economic system rather than threaten China's unification.
If the U.S. shows goodwill to China, the Chinese would like to compromise.