China cuts a trade deal
The Financial Times reports that China has made numerous trade concessions in a deal with the United States: China agreed to delay indefinitely a plan to impose a security standard for wireless communications that would have forced US telecommunications companies to license the technology from Chinese competitors. The US believed the plan signalled that China ...
The Financial Times reports that China has made numerous trade concessions in a deal with the United States:
The Financial Times reports that China has made numerous trade concessions in a deal with the United States:
China agreed to delay indefinitely a plan to impose a security standard for wireless communications that would have forced US telecommunications companies to license the technology from Chinese competitors. The US believed the plan signalled that China was clinging to government-led industrial policies designed to aid its own technology companies at the expense of US rivals. China also agreed to renew efforts to crack down on illegal pirating of US movies, software and music, with Beijing pledging to step up criminal actions against companies that produce, import or export counterfeited goods. China presented US trade officials with an action plan designed to “significantly reduce” infringement of intellectual property rights. In addition, China agreed to accelerate plans to make it easier for US companies to export and sell directly into China by eliminating laws that forced foreign firms to work through Chinese state trading enterprises. The agreement is the strongest sign yet of the countries’ maturing trade relationship. Unlike the US-Japan trade talks of the 1980s and early 1990s in which Japan would grudgingly accede to pressure to open its markets to US goods, yesterday’s deal involved concessions on both sides. The Chinese won US agreement to ease national-security-related export controls on sales of high-technology goods to China. Beijing has argued that the US is hurting its exports by refusing to sell China products such as machine tools.
Chinese central bank officials have also indicated that they plan to shift the renminbi from a fixed rate to a floating rate:
Guo Shuqing, administrator of China’s foreign exchange reserves of $440bn, told the Financial Times Beijing no longer favoured a fixed exchange rate and would move toward a floating system as part of reforms to loosen up capital controls and give market forces more scope. “We don’t think that a fixed system is good. We think that a floating system is good,” said Mr Guo, head of the State Administration of Foreign Exchange and a deputy governor of the central bank. He did not specify a timetable for the shift to a new exchange rate mechanism.
Question to those advocating greater protectionism towards China — are these concessions sufficient? If not, what else?
Daniel W. Drezner is a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University and co-host of the Space the Nation podcast. Twitter: @dandrezner
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