Interview: China’s Vast Market Can Be Key to Trade Negotiations
By Wang Liwei and Qing Na
China should leverage its strength as a major importer to boost its position in trade negotiations with other nations, as it tries to mitigate the impact of U.S. tariff hikes, a former chief economist at the Asian Development Bank told Caixin.
China has defended its title as the world’s second-largest importer for 16 straight years, with its share of global imports now standing at 10.5%, according to the latest data from the country’s General Administration of Customs.
Countries outside the U.S. need to recognize that China’s global import share represents business opportunities, said Shang-Jin Wei, now a professor of finance and economics at Columbia University, in an interview with Caixin on Sunday.
“China is one of the world’s leading importers. Products that were previously imported from the U.S. now need to be sourced from new trading partners,” he said, noting this shift will provide incentives for other countries to engage with China.
The trade war between the world’s two largest economies has escalated rapidly since President Donald Trump’s “reciprocal tariffs” onslaught this month, which kicked up the additional levies on Chinese imports imposed by the current U.S. administration from 20% to 145%.
In addition to these tariff hikes, the Trump administration has been using the “reciprocal tariffs” as a tool to pressure other countries into limiting their trade relations with China. Emphasizing China’s import potential will increase its bargaining power in trade negotiations, making other countries less willing to make unilateral concessions to the U.S. under pressure, Wei told Caixin.
China is already reaching out to trade partners in Europe and Asia. On April 8, Premier Li Qiang held a phone conversation with European Commission President Ursula von der Leyen. Li said that the two sides should enhance communication and coordination to jointly safeguard free and open trade, while von der Leyen said that both sides are committed to upholding the multilateral trading system. Similar calls took place this month between China’s Commerce Minister Wang Wentao and his counterparts in the Association of Southeast Asian Nations, Saudi Arabia and South Africa.
China needs to showcase opportunities for foreign exporters more explicitly, encouraging other countries to consider their trade relationships with China from a more comprehensive perspective, Wei said.
To this end, he suggested China leverage international events, such as the China International Import Expo, an annual event launched by President Xi Jinping in 2018 to promote China’s imports as Trump demanded that the country cut its trade surplus with the U.S.
China’s international trade events also include the Canton Fair, a twice-yearly trade expo currently taking place in the southern city of Guangzhou. The event typically draws participants from more than 200 countries and regions.
Contact reporters Wang Liwei (liweiwang@caixin) and Qing Na (qingna@caixin.com) and editor Jonathan Breen (jonathanbreen@caixin.com)
caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.
Image: Salsabila Ariadina – stock.adobe.com