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Triumph of Resolution
Xi-Trump meeting shows dialogue is the best way to narrow differences
By An Gang  ·  2019-07-08  ·   Source: NO.28 JULY 11, 2019
Chinese President Xi Jinping meets with U.S. President Donald Trump in Osaka, Japan, on June 29 (XINHUA)

Amid China-U.S. trade tensions, the bilateral meeting between Chinese President Xi Jinping and his U.S. counterpart Donald Trump on the sidelines of the Group of 20 (G20) Summit in Osaka was the cynosure of all eyes and the two leaders' agreement that the two countries would jointly advance a relationship featuring "coordination, cooperation and stability" has injected optimism into their domestic as well as the international market.

The Osaka meeting did not come easily. In 2017, the Trump administration started a trade war, in the name of promoting "fair trade" and protecting intellectual property worldwide, targeting China in particular. Though China readily sat for negotiations and implemented new domestic policies for further reform and opening up, the U.S. imposed a series of tariffs on Chinese exports.

As of May, Washington had hiked tariffs on $200 billion of Chinese goods from 10 percent to 25 percent. It also started the process to add tariffs on another $300 billion of Chinese goods and a public hearing on the measure in the U.S. had just ended by the time of the Osaka meeting.

In the face of Washington's aggressive measures, China was forced to respond with retaliatory tariffs. The bruising encounters between the world's two largest economies not only impacted the bilateral trade relationship, but also exacerbated concerns about a global economic recession. The tension was not limited to trade but also triggered a further "tech war." The Trump administration issued multiple executive measures that threatened to cut the supply chain of leading Chinese telecom company Huawei and blacklisted other technology companies.

Actually, since the end of 2017, the Trump administration has adjusted its national security strategy, labeling China and Russia as "strategic competitors" who have to be guarded against and curbed. This background affirmed the view that the U.S. doesn't want to see the rise of China.

Before the Osaka meeting, the overall China-U.S. relationship suffered the sharpest drop since the two countries established diplomatic ties in 1979, making it an urgent agenda for the Chinese leadership to reconsider China's external security environment and its relationship with the United States. However, the adjustments can't be made in a day. Also, while trying to ensure the stability of the external environment, maintaining China's own development is still the priority of the Chinese leadership.

Against this background, Xi accepted Trump's invitation to meet in Osaka and spoke with him over the phone on June 18 before the meeting, stressing that "both China and the U.S. gain from cooperation and lose from confrontation." He also said the trade teams of the two countries should maintain communication to resolve the conflict.

Xi and Trump also talked with each other at the G20 banquet on June 28 in a kind of prelude to the bilateral meeting on the next day. The meeting focused on the fundamental rules to handle the trade and economic friction and the Korean Peninsula situation. On the same night, Trump signaled his aim to shake hands with Kim Jong Un, leader of the Democratic People's Republic of Korea (DPRK), and say "hello." Trump and Kim eventually met at the demilitarized zone during the president's visit to the Republic of Korea on June 30, their third meeting since the first one in June 2018.

Recalling past diplomacy

When the much-awaited Xi-Trump meeting took place at the Osaka International Convention Center on June 29, Xi reminded Trump of the start of "ping-pong diplomacy" in Nagoya, Japan in 1971, when an exchange took place between Chinese and U.S. table tennis players during the 1971 World Table Tennis Championships, signaling a thaw in the two countries' frosty relationship at that time.

He said despite the tremendous changes in the global situation and the China-U.S. relationship, one thing has remained unchanged that China and the U.S. both benefit from cooperation and lose from confrontation. Cooperation and dialogue work better than friction and confrontation. Although there are some differences between China and the U.S., both sides have highly integrated interests and extensive cooperation areas. China and the U.S. should not fall into conflict and confrontation, but should promote each other and develop together.

On trade and economy, Xi also stressed that China-U.S. trade cooperation is mutually beneficial. China is sincere about continuing trade negotiations with the U.S. and handling the current and potential issues. However, the negotiations should be on the basis of equality, featuring mutual respect and resolving each other's reasonable concerns. On issues concerning China's sovereignty and dignity, China has to protect its core interests. The differences between China and the U.S. will eventually be solved through negotiations to reach a deal acceptable and favorable to both sides.

Trump said he harbors no hostility toward China and hopes for better relations between the two countries. He said he values maintaining a good relationship with Xi and would like to strengthen cooperation with China. The U.S., he said, hopes to balance bilateral trade and provide just opportunities for the enterprises of both countries through negotiations. The U.S. would like to reach a trade deal acceptable to both sides, which would be of historical significance.

The Osaka consensus

Xi and Trump reached a consensus on some issues. They agreed to restart the trade negotiations on the basis of equality and mutual respect. The U.S. would not impose any new tariffs on Chinese goods, Trump said, and hoped China would increase imports from the U.S. China anticipated the U.S. would treat Chinese enterprises and students in the U.S. justly, ensuring normal cooperation between the two countries' enterprises and communication between their people.

While Trump welcomed Chinese students studying in the U.S., Xi clarified China's stand and principle on the question of Taiwan, that it is an inalienable and integral part of China, and Trump reaffirmed the U.S. commitment to the one-China policy. Xi also reiterated China's stance on the Korean Peninsula issue, urging the U.S. to demonstrate flexibility and meet the DPRK halfway, including easing sanctions on Pyongyang and seeking solutions for their respective concerns through dialogue. Xi also stressed that China is willing to continue playing a constructive role between the two sides. Trump's response was that the U.S. values China's role in the peninsula issue and would like to keep in touch with China on this.

Wang Yi, Chinese State Councilor and Foreign Minister, said at a press conference after Xi's Osaka trip that "despite the existing contradictions and discrepancies between China and the U.S., we have confidence to stabilize the China-U.S. relationship in the long term and benefit the people of the two countries and the world at large, as long as the two sides follow the consensus reached by the leaders of the two countries, hold tight to the right direction of the bilateral relationship, cooperate on the basis of mutual interests, and properly handle the discrepancies and other potential problems with mutual respect."

A stand against bullying

The restart of trade negotiations has injected confidence into the two countries' domestic and international markets and stabilized expectations. The development marks the success of China's resolute resistance against U.S. hegemony. Trump doesn't want to prolong the trade dispute since his aggressive measures against China and sanctions against Chinese technology firms affect the U.S. domestic situation as well. Many multinational companies, agricultural producers and information technology firms have opposed Trump's tariffs as they would not like to lose the huge Chinese market, or find replacements for China-made components. The curbs on Chinese scholars and students have obstructed research and development in the U.S. An impasse in China-U.S. trade negotiation will also cast a shadow on the U.S. economy and affect the 2020 election, which Trump is contesting, eyeing a second term.

Although the two leaders did not set a date for the resumption of negotiations during the Osaka talks, they have a better idea of each other's bottom line now. With the urgency to reach a deal rising, it is expected that the trade negotiation will pick up speed and a deal will be reached in the coming months. U.S. Treasury Secretary Steven Mnuchin told U.S. business news channel CNBC on June 26 that China and the U.S. have reached consensus on 90 percent of the deal.

Though the Xi-Trump meeting in Osaka came under the global spotlight, Xi's G20 message went beyond the China-U.S. relationship. He defended multilateralism, promoted the spirit of partnership and outlined the series of measures China has taken to further open up its market, improve the business environment, and promote free trade agreements and regional economic integration.

An indisputable conclusion that arises from America's strategic shrinkage and retrogressive measures is that they have pushed China to play a bigger role in leading economic globalization and reforming the international order. China's principles are clear: No matter how turbulent the external environment is, it will give priority to its own affairs and will not close the door of reform and opening up. If external pressures lead to breaking the bottlenecks in domestic reform and improving China's foreign policy, they would be regarded as a blessing in disguise.

The author is an op-ed contributor to Beijing Review and a researcher with the Pangoal Institution

Copyedited by Sudeshna Sarkar

Comments to yulintao@bjreview.com

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