Golden Finance reported that on June 9th local time, the global economic community focused on London, UK. He Lifeng, a member of the Political Bureau of the Central Committee of the Communist Party of China and vice Premier of The State Council, led a Chinese team to hold the first meeting of the China-Us economic and trade consultation mechanism with US representatives here. The convening of this meeting is a key measure to implement the spirit of the important phone call between the leaders of the two countries. Under the current complex global economic and trade situation, it has attracted much attention from all sides.
Previously, the heads of state of China and the United States had a phone call on June 5th. Both sides agreed that their teams would continue to implement the Geneva Consensus well and hold a new round of talks as soon as possible. The first meeting of the economic and trade consultation mechanism in London this time is precisely an active practice of this important consensus. The Geneva Consensus has laid the foundation for the improvement of China-Us economic and trade relations, and this meeting shoulders the important mission of further promoting economic and trade cooperation between the two sides and resolving existing differences.
On the eve of the meeting, both sides had their own considerations and actions. The United States has been making frequent moves recently, attempting to increase its leverage before the negotiations. The US Department of Commerce has issued guidelines to impose restrictions on Huawei’s artificial intelligence chips, claiming that any enterprise using Huawei’s Ascend 910 series chips will “violate US export controls”. Meanwhile, the US government has informed energy companies that they must obtain government licenses when selling ethane products to China. The ethane export requests of some US enterprises have been rejected by the Department of Commerce, which means that ethane exports to China have been suspended. In addition, the US has explicitly halted the sale of chip design software to China. Moreover, on June 7th, some US media reported that the US has suspended the sales license for its nuclear equipment suppliers to export products to China.
However, in the face of the measures taken by the US side, China is not completely powerless to respond. Even though Huawei chips cannot enter the US and some Western markets, they have a vast domestic market in China, which is sufficient to support Huawei’s continuous development. In the areas where the US restricts exports, China also has many alternative solutions or has achieved a high degree of domestic production. For instance, the domestic production rate of China’s “Hualong One” nuclear power products has reached over 90%. Not only that, China also holds an “ace card” in its hands. In the global pharmaceutical supply system, China holds a dominant position, and American medical enterprises rely heavily on raw materials from China. According to statistics, 80% of the raw materials for amoxicillin production in the US market come from China. Last year, over 90% of the hydrocortisone and ibuprofen imported to the US also originated from China. Moreover, in the rare earth sector, according to data released by the International Energy Agency, China’s rare earth ore output accounted for over 60% of the global total in 2023, and its processed rare earth output made up 92% of the global total. Data from the United States Geological Survey shows that 70% of the rare earths used in the United States from 2020 to 2023 came from China.
At this first meeting of the China-Us economic and trade consultation mechanism, the US side sent a relatively complete economic and trade team. The participation of the US Secretary of Commerce and trade representatives, although it has enhanced the completeness of the consultation mechanism, from the experience of US-Japan negotiations, the different goals, paths and positions of multiple negotiators may add variables to the negotiations. However, consultations and dialogues between China and the United States in various fields have been relatively frequent. Economic and trade issues have long been an important part of regular consultations. The two sides have a relatively in-depth understanding of each other, which also provides favorable conditions for achieving positive results at this meeting.
During the meeting, the two sides will conduct in-depth discussions on a wide range of economic and trade topics, covering multiple fields such as agricultural products, industrial manufactured goods, services, investment, and technological cooperation. In the face of new circumstances such as geopolitical conflicts, climate change, and the rise of artificial intelligence, how to leverage each other’s strengths, reduce trade costs and disruptions, and optimize industrial and supply chain cooperation has become a direction that both sides need to jointly explore.
As the two largest economies in the world, the economic and trade relations between China and the United States are not only of great significance to the two countries, but also profoundly influence the stability and development of the global economy. The market expects both sides to demonstrate sincerity at this meeting, engage in candid dialogue and equal consultation with a pragmatic attitude, effectively manage differences, and deeply explore cooperation potential, so as to inject new vitality into China-Us economic and trade relations and bring more certainty and stability to global economic development. The progress and outcomes of the subsequent meetings will be closely followed by all sectors.
Related Topics:
