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Global Times

China eyes Biden team for trade talks

Global Times

By Wang Cong and Ma Jingjing Source: Global Times Published: 2020/12/1 20:57:57 Last Updated: 2020/12/1 21:52:57

Tensions likely to persist despite Biden's approach: experts

As US president-elect Joe Biden started to pick his economic team, China is also waiting to see who will take over Washington's years-long trade and technology war with Beijing, with analysts expressing "cautious optimism" after Biden chose economists with no obvious anti-China views, including Treasury Secretary nominee Janet Yellen, to his cabinet.

While Biden's economic team will primarily face a daunting task of saving the US economy from plunging further amid the raging COVID-19 epidemic in the country, and key economic positions remaining to be filled, they will also have to deal with thorny issues left over by the current US administration, such as tariffs and tricky negotiations with China, experts said.

But given the known candidates as well as Biden's style, the new team is unlikely to be chaotic and erratic in trade talks, though tensions will likely persist given their longstanding grievances over China, and intention to contain China's rise, experts noted. They urged China to remain steady and consistent in its stance.

New team

Biden on Monday named former US Federal Reserve Chair Yellen to the post of Secretary of the Treasury, in his first picks for top economic and trade positions. However, other positions such as the US Trade Representative (USTR) and US Secretary of Commerce have yet to be announced.

Biden also nominated Cecilia Rouse, one of the nation's top labor economists, to serve as chair of the Council of Economic Advisers (CEA), and has tapped Jared Bernstein, who served as Biden's chief economist throughout the Obama administration, to serve on the council. The CEA is a panel of experts charged with providing the US president advice and direction on economic policy. Biden nominated Brian Deese, a White House advisor during the Obama administration, to lead his National Economic Council.

Among the new picks, Yellen's position is the one that will have direct dealings with China, as the US Treasury Department is tasked with reviewing other countries' currency policies, imposing sanctions on other countries and entities, as well as taking part in trade policy formation.

Under incumbent Treasury Secretary Steve Mnuchin, the department has issued reports of the yuan's foreign exchange rates, though it stopped short of declaring China a currency manipulator. It also oversees the collection of tariffs on hundreds of billions of dollars worth of Chinese goods. Mnuchin was also a key member of the US negotiating team with China.

"[Yellen] has got a huge headache in the domestic economic crisis, but she also has to deal with all these delicate issues left over by the Trump administration," Mei Xinyu, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Tuesday.

Mei said that Biden will likely bring back career bureaucrats and economists, who have "deep prejudice" against China's economic system and will likely pursue the US' ill-intentioned goal of containing China's rise.

In the case of Yellen, while she has criticized Trump's trade war against China, she has also repeated similar accusations against China's economic and trade policies.

At the Asian Financial Forum held in Hong Kong in January 2020, she said that the phase one trade deal still makes most Chinese goods subject to "pretty high levels" of US tariffs that won't be "very noticeable" for US households. She also warned that unresolved tensions over technology between the two economic powerhouses could divide the world and slow the development of artificial intelligence and 5G.

However, at the same forum, Yellen also listed China's subsidies for state-owned firms, "forced technology transfer" and competition with the US in 5G as thorny issues between the two countries.

"The Biden administration may revise Trump's erratic approach of imposing sanctions on certain Chinese companies. At the same time, the US may cooperate with its allies to establish rules on human rights, freedom of speech, and the environment to contain China's development," Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing, told the Global Times on Tuesday.

New style

Still, while she subscribes to US accusations against China, Chinese analysts say Yellen and other economic cabinet members will be less chaotic in bilateral talks and dealings than during the Trump administration, where leadership as well as policies changes very often.

"Given Yellen's pragmatic character in her previous career and public comments showing support for open trade and globalization, it's believed that a Yellen-headed Department of Treasury will promote dialogue with China," He Weiwen, a former senior trade official and a senior fellow of the Chongyang Institute for Financial Studies at the Renmin University of China, told the Global Times on Tuesday.

Meanwhile, Deese, who has represented the interests of large US companies that "have tasted the sweetness of doing business with China," is also likely to promote cooperation with China, He Weiwen said.

Chinese analysts said that there will be a clear division of responsibility between Yellen, the USTR and Commerce Secretary when it comes to trade talks with China, with the USTR and Commerce Secretary likely taking the lead, while Yellen focuses on the US domestic economy. That would be an improvement from the Trump administration, where various forces, including radical anti-China advisors led by Peter Navarro, and more moderate forces like Mnuchin, constantly fought for leadership, analysts noted.

"While I have no hope that things will be smooth from now on between China and the US, I think we will at least have more steadiness and stability in our communications," Mei said.

While Chinese officials have not spoken about the future of the phase one trade agreement with the US, lingering tariffs or future trade negotiations with the US under Biden, they have sent clear positive signals that they will carry out the deal and want to engage with the US in a constructive manner.

On Monday, Chinese officials said China had completed 37 Customs quarantine protocols that allow more US agricultural products, including potatoes, poultry and pet food, into the Chinese market.

While China will continue the deal as a goodwill gesture for the new US administration, it will also remain firm on its own principles in future talks, analysts said. "After all these years, we will have even more strategic focus and resolve in insisting on our own stance," Mei said.



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