What are we talking about?, Senior economic officials from China and the United States sit at the negotiating table, Yellen visits Beijing, World | United States | Economy

Without trust, the country will not prosper

As agreed by both China and the United States, US Treasury Secretary Janet Yellen will visit China from July 6th to 9th. The world is intertwined with turmoil, and high-level economic officials from China and the United States have finally sat at the negotiating table in Beijing. From bilateral to global, the topics at the negotiation table include tariffs, investment, semiconductors, global debt, addressing climate change, and the Ukrainian crisis.

Following US Secretary of State Antony Blinken's visit to China last month to explore the way, what can Yellen's appearance bring to the two countries and the world?

Xu Feibiao, Director of the BRICS and G20 Research Center at the China Institute of Modern International Relations, said that if the two sides can reach consensus in the economic and trade field and seek cooperation on global issues, "stabilizing the relationship between the two countries" would be a blessing for the world.

In April this year, Yellen publicly stated that completely separating the US and China economies would be catastrophic for both countries, and that noise should be filtered out and explained based on calm reality. "The two countries should have the ability to openly discuss difficult issues, and if conditions permit, our two countries should cooperate to benefit our two countries and even the world."

The US Embassy in China stated in its press release that Yellen's goals during his visit to China include seeking to establish healthy economic relations with China, promoting mutually beneficial growth and innovation, and expanding economic opportunities for American workers and businesses.

Based on the above statements, combined with previous experiences as the Chairman of the Federal Reserve and others, Xu Feibiao believes that Yellen belongs to the rational and pragmatic faction. As a heavyweight official responsible for economic affairs in the Biden administration, this is her first visit to China as finance minister, and the interrupted high-level financial exchanges between the two sides have finally resumed.

Do business first, then discuss grievances and grievances

Saying is easy, but doing is difficult. The relationship between the two countries is at its lowest point since the establishment of diplomatic relations.

The confrontation between China and the United States involves many aspects such as economy, trade, security, and global issues. Experts in Beijing analyze that there is a greater chance for the two countries to reach a consensus in the field of economy and trade. In the business world, the two countries have more common interests.

If an economic and trade consensus can be reached, the confidence of the business communities of both countries will be greatly benefited. Gao Lingyun, a researcher at the Institute of World Economy and Politics at the Chinese Academy of Social Sciences, said that in China's exchanges with the United States, China is pragmatic and not complacent. The US debt ceiling bill has been passed, but if overseas buyers are indifferent, it will still be a big trouble for the US. Behind the export to China, there are also one million job opportunities.

The Chinese market is not an optional option, but a mandatory option. According to US data, the total amount of goods trade between the United States and China reached $690.6 billion in 2022, setting a historical record. The data collected by the Chinese side is even larger, with bilateral trade reaching over 750 billion US dollars last year.

Behind the massive trade, there is still potential in bilateral economic and trade. Wang Shouwen, International Trade Negotiator and Deputy Minister of the Ministry of Commerce of China, publicly stated in March this year that the economic and trade relations between China and the United States have not only been affected by the epidemic in the past year or two, but also by some unilateral protectionist measures taken by the United States. The potential for complementarity and resilience in economic and trade between the two countries has not been fully utilized. Last year, China's export growth rate to the world was 6 percentage points higher than that of the United States, while the growth rate of US exports to the world was 16 percentage points higher than that of US exports to China.

Although bilateral trade between China and the United States set a historical record in 2022, the growth rate was not fast. Wang Shouwen said that the potential has not been fully realized. The restrictive measures taken by the United States on Sino US trade have constrained the development of bilateral economic and trade relations, damaged the comparative advantage of the United States and the competitiveness of its own products, and also undermined the confidence and willingness of Chinese and American enterprises to strengthen cooperation.

A person cannot stand without faith, and a country cannot prosper without faith. Gao Lingyun said that the two countries need to create a stable and predictable economic and trade environment to enhance confidence in business cooperation between the two countries. The two countries not only need to negotiate and exchange ideas, but more importantly, they must keep their promises and not say one thing at a time. When I was in Beijing, it was well said that once I returned to Washington or even halfway through, I changed my rhetoric. As for the actual actions, they disappeared and even regressed.

No fussing, no showing off

In front of the world, both China and the United States have the strength to maintain confidence.

In the past decade, China's average annual economic growth has reached 6.2%, and the proportion of the global economy has increased from 11.3% in 2012 to around 18%. It has always been the biggest engine driving global economic growth. China's development has not only improved the lives of its own people, but also provided a large number of high-quality and affordable products to countries including the United States. It is an important "ballast stone" and power source for international free trade and stable world economic growth. Gao Lingyun believes that China is the most dynamic market for development, and the potential for future growth is still enormous.

In recent years, although the rhetoric of "building walls and barriers" and "decoupling and breaking chains" towards China has never stopped, China has always insisted on: reform does not stop, and opening up does not stop. China is implementing a more proactive opening-up strategy, building a global network of high standard free trade zones, accelerating the construction of pilot free trade zones and Hainan Free Trade Port, and promoting the high-quality development of the "the Belt and Road".

Yellen, who visited China, is equally confident in his country's development prospects. She said that the United States has repeatedly proven its ability to face new challenges through adjustment and innovation. The United States is not only the world's largest economy, but still holds the top spot in a series of economic indicators, including total wealth, technological innovation, and other aspects.

While confident, both countries also face challenges. Xu Feibiao said that the United States is the most dynamic and prosperous economy in the world, but it also faces the challenge of controlling inflation and maintaining economic recovery. Competition among major powers cannot solve the problems of the United States itself and the challenges facing the world.

To ensure economic prosperity, both sides still need to continue to work together.

Yellen said before his visit to China that China's economic development is not necessarily contradictory to the leadership role played by the United States in the economic field. New immigrants from China have provided new nutrients for American innovative culture. According to the index of Nature magazine, both the United States and China are each other's most important partner countries in the field of scientific research.

Chinese Ministry of Commerce spokesperson Shu Jueting said that the economies of the two countries complement each other, their interests blend, and both benefit from each other's development. Bilateral economic and trade cooperation not only concerns the vital interests of the two peoples, but also plays a crucial role in promoting global economic growth and enhancing the well-being of people in all countries.

The discord between China and the United States makes the world uneasy

Amidst the discord between China and the United States, other countries cannot stand idly by, let alone expect to profit from it. Xu Feibiao said that the world is concerned about the current situation of China US relations and does not want conflicts and confrontations between the two countries. He hopes for peaceful coexistence and friendly cooperation between China and the United States.

This year, the global situation is more severe than last year, and the economy is slowing down. After the aftermath of the energy crisis, high inflation, and banking crisis, Germany, the locomotive of the European economy facing multiple challenges, has not escaped the fate of recession. The German Chamber of Commerce predicts that the German economy will experience zero growth in 2023. The banking crisis in Europe and America has temporarily stabilized under strong government intervention, but the fundamental problem has not been resolved. Xu Feibiao believes that without cooperation between China and the United States, the world cannot be peaceful and business cannot be conducted.

The EU has clearly stated its unwillingness to "take sides". The EU's High Representative for Foreign and Security Policy and Vice President of the European Commission, Borrell, said that the world has changed and we hope to build an international order where cooperation outweighs confrontation. China and the European Union have strong economic ties, with a total trade volume of nearly 850 billion euros in 2022.

Southeast Asian countries such as Singapore, which also have close economic and trade ties with China, have publicly expressed their unwillingness to take sides. Xu Feibiao said that no one can bear the cost of Sino US relations.

Not only bilateral affairs, but also a series of global issues such as global debt and climate change require the two countries to work together. The vast Earth can fully accommodate the development and common prosperity of China and the United States.