Donald Trump's $250 billion China "miracle" adds gloss to off-kilter trade
Bloomberg|
Updated: Nov 10, 2017, 12.26 AM IST
BEIJING/SHANGHAI: President Donald Trump can return to the US claiming to have snagged over $250 billion in deals from his maiden trip to Beijing. Whether those deals live up to the lofty price tag is another question altogether.
Watched by Trump and China’s President Xi Jinping at a signing ceremony in Beijing, US planemaker Boeing, General Electric and chip giant Qualcomm sealed lucrative multi-billion dollar deals.
The quarter of a trillion dollar haul underscores how Trump is keen to be seen to address a trade deficit with the world’s secondlargest economy that he has long railed against and called “shockingly high” on Thursday.
But US businesses still have many long-standing concerns to complain about, including unfettered access to the China market, cybersecurity and the growing presence of China’s ruling Communist Party inside foreign firms.
William Zarit, chairman of the American Chamber of Commerce in China, said the deals pointed to “a strong, vibrant bilateral economic relationship” between the two countries.
“(These deals) allow Trump to portray himself as a master dealmaker while distracting from a lack of progress on structural reforms to the bilateral trade relationship," Hugo Brennan, Asia analyst at risk consultancy Verisk Maplecroft, said in a note.
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As is often the case during state visits, many of the deals were packaged as “non-binding” agreements, gave scant details or rolled over existing tie-ups, helping pump up the headline figure. “I suspect they might be primarily MoUs (memorandum of understandings) instead of actual contracts and the actual contract amount may be substant ial ly less.”
Speaking alongside Trump in Beijing as they announced the deals, Xi said the Chinese economy would become increasingly open and transparent to foreign firms, including those from the United States, and welcomed US companies to participate in his ambitious “Belt and Road” infrastructure-led initiative.
Trump made clear he blamed his predecessors, not China, for allowing the US trade deficit to get “out of kilter”, and repeatedly praised Xi, calling him “a very special man”.
Watched by Trump and China’s President Xi Jinping at a signing ceremony in Beijing, US planemaker Boeing, General Electric and chip giant Qualcomm sealed lucrative multi-billion dollar deals.
The quarter of a trillion dollar haul underscores how Trump is keen to be seen to address a trade deficit with the world’s secondlargest economy that he has long railed against and called “shockingly high” on Thursday.
But US businesses still have many long-standing concerns to complain about, including unfettered access to the China market, cybersecurity and the growing presence of China’s ruling Communist Party inside foreign firms.
William Zarit, chairman of the American Chamber of Commerce in China, said the deals pointed to “a strong, vibrant bilateral economic relationship” between the two countries.
“(These deals) allow Trump to portray himself as a master dealmaker while distracting from a lack of progress on structural reforms to the bilateral trade relationship," Hugo Brennan, Asia analyst at risk consultancy Verisk Maplecroft, said in a note.
PUMP IT UP
As is often the case during state visits, many of the deals were packaged as “non-binding” agreements, gave scant details or rolled over existing tie-ups, helping pump up the headline figure. “I suspect they might be primarily MoUs (memorandum of understandings) instead of actual contracts and the actual contract amount may be substant ial ly less.”
Speaking alongside Trump in Beijing as they announced the deals, Xi said the Chinese economy would become increasingly open and transparent to foreign firms, including those from the United States, and welcomed US companies to participate in his ambitious “Belt and Road” infrastructure-led initiative.
Trump made clear he blamed his predecessors, not China, for allowing the US trade deficit to get “out of kilter”, and repeatedly praised Xi, calling him “a very special man”.
