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China Has Fallen Short on Purchases, the U.S. Still Happy

The U.S.-China trade deal is not just about purchasing more American goods, according to former top White House trade negotiator.

Former deputy director of the National Economic Council, Clete Williams, stated, ” There is a whole side to this deal and on the structural components, whether it comes to intellectual property, financial services, market access, and having China some of its laws on agriculture, China is more or less, doing what it said it was going to do.”

He also explained that despite the lack of purchases, the U.S. remained happy with the deal. Willems was previously part of the U.S. team negotiating with China. Then, he left his position in the White House the previous year and currently a partner at a law firm Akin Gump.

Furthermore, the Chinese government has been looking for a way to have better market access for foreign enterprises to do business in China. Also, it promised to develop intellectual property protection.

 

Short on Purchases

Still, the country has fallen short on its promised purchases in the phase one trade deal signed in January. In the agreement, China signed to buy another $200 billion worth of U.S. goods for the next couple of years. This is aside from the 2017 export numbers.

Based on the Peterson Institute for International Economics, China should have purchased a total of $142.7 billion of American goods by the end of 2020, if measured using U.S. export data. But using the official Chinese import data, Beijing should buy $172.7 billion this year.

Willems said, “They got to do better on the purchase side, everyone knows that.”

Nevertheless, he said that they were behind due to the coronavirus pandemic.

 

Tensions Between the U.S. and the Chinese Government

The comments of Willem arrived amid the heightened tensions in U.S.-China relations because of the November presidential election.

In the previous week, President Donald Trump released executive orders banning U.S. transactions with Chinese tech firms Tencent and ByteDance.

Particularly, Tencent-owned Chinese messaging app, WeChat, is a thing a lot of U.S. enterprises see as vital when doing business in China. Willems believes that if they can’t use it, they are going to be at a massive disadvantage to their competitors from Europe, Japan, and elsewhere. With that, trade could be affected.

 

The Coming Elections

While the relationship with the Trump administration remains rocky, China wants a Biden reset. Willems added that the Asian economic giant believes relations would be in a better condition if Joe Biden wins in November.

But the Democratic presidential nominee and former U.S. vice president will possibly be tougher on China compared to what Beijing expects.

Willems noted, “They are looking at his history, his track record with the Obama administration.”

He also said that he might not be as aggressive as the current president, but he’ll be aggressive too, being a bit more predictable. And that is what Willems thinks the country is counting on.



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