Sino - US trade "Hundred Days Plan" big guess

The most important outcome of the "XiTeHui" is perhaps the 100-day plan to be launched between China and the United States. The future of Sino-US trade to achieve "rebalancing" is likely to increase the US exports to China to achieve the way. This idea, the two countries may be in which areas and areas to find fulcrum? On the above series of issues, CF40 Research Department out of a Sino-US trade "cooperation and counter" list.

The most important outcome of the "XiTeHui" is perhaps the 100-day plan to be launched between China and the United States. According to the US White House official website, US Commerce Secretary Ross said on April 7 that China and the United States will focus on cooperation in the field of trade launched a 100-day negotiations aimed at narrowing the trade imbalance between China and the United States.

At the same time, according to the British "Financial Times" reported that China will invest in the financial sector and beef exports to the United States to provide a more open market, this decision may also be included in the "Hundred Days Plan" agenda.

The news confirms the findings of the China Financial Forum (CF40), which should reduce trade barriers for livestock products, such as liberalizing the ban on US beef imports, and that China should open up the financial sector moderately. CF40 Research pointed out that after China's accession to the WTO, the fact that China's financial sector is limited in its openness, for example, the proportion of foreign banks to total assets of China's banking sector is 1.5% in 2003 and 1.34% in 2015. The further opening up of financial markets will help to improve the productivity of China's financial services, including the removal of restrictions on foreign shares, the strengthening of transparency of laws and regulations.

From the current disclosure of the news, "learn special" did not touch the two most controversial trade issues between the two countries, such as China's imports of US cars levy 25% tariffs, China's steel exports. Are these issues likely to be included in the "Hundred Days Plan" agenda?

And then from the US Treasury Secretary Nuqin "Our goal is to increase exports to China," the point of view, the future Sino-US trade to achieve "rebalancing" is likely to increase the US exports to China to achieve the way. This idea, the two countries may be in which areas and areas to find fulcrum?

On the above series of issues, CF40 Research Department out of a Sino-US trade "cooperation and counter" list.

Sino - US trade to strengthen cooperation in the field

Increase imports from agricultural products in the United States

China's imports of US agricultural products reached US $ 15 billion in 2015, mainly from imports of crops such as Illinois and Iowa, with imports of 16 and US $ 1.4 billion, respectively, but trade with agricultural products in Greater Florida The deal is not high. Florida has 27 seats in the House, second only to California and Texas, with high political influence. The state is facing some employment pressure, the unemployment rate is still higher than the pre-crisis level in 2006, and the export of goods supported by the number of jobs declined in recent years. In 2015, the state's exports to China amounted to US $ 1.2 billion, with services exports increasing by an average of 208% from 2006 to 2014. However, compared to other states, Florida's trade relations with China still have a lot of room for development. Florida is rich in citrus and other agricultural products and attach importance to agricultural protection, in the 1980s and Japan produced more than the citrus trade conflict, the current state legislators in Congress may be inclined to trade protection policy. To avoid this, China can strengthen trade with Florida's agricultural products, such as raising citrus imports to influence the direction of trade policy of Florida lawmakers.

In addition, the timber industry has always been the United States political sensitive issues, in recent years, China and the United States also appeared in the wood industry double reverse cases. In addition to controlling unnecessary trade frictions, China should also pay attention to trade cooperation with the development of forestry products in Washington State. Because Washington State occupies 10 seats in the House of Representatives, there is strong political influence, and forestry products are Washington's third largest export to China, and strengthening trade with Washington State is also conducive to improving Congress's support for free trade degree.

Reduce trade barriers for livestock products

Since 2003, the US beef and beef products were detected "mad cow disease", China will stop the vast majority of US beef imports. At present, China's beef imports are mainly from Australia, Brazil, Uruguay and other countries. With the growth of market demand, China's beef imports in 2012 after the rapid growth in China in 2016 total imports of beef and chop suey 58 million tons, a total of 2.5 billion US dollars.

China and the United States to expand the potential of pork trade is also very large. China's pork imports also rose rapidly after 2010, reaching $ 3 billion in 2016, of which about $ 400 million was imported from the United States. China has strict restrictions on the import of US pork and pork products because of the safety residue standard of the United States in the pork of the dopamine (commonly known as "clenbuterol") is far below the Chinese standard. If the future of the United States to improve the pork industry, the regulatory standards for additives, pork trade between China and the United States will have more room for development.

Strengthen energy trade with traditional energy states such as Texas

The United States will soon become an important global oil exporter. China is the world's largest importer of crude oil, there are signs that imports from the United States the number of crude oil is a breakthrough growth. Although China imported only 0.13% of the total imports from the United States in 2016, it was already six times the amount of imports in 2015, and the amount of crude oil imported from the United States in January 2017 has reached 2/3 of 2016.

Trump government intends to vigorously promote the development of energy industry, including shale oil and gas and other non-traditional energy and traditional energy industries. Energy industry expansion can create a large number of employment, while a large number of natural gas in the presence of ethylene and ethylene is the first few US exports of chemical raw materials, is conducive to improving the trade deficit, which for Trump's campaign goals are of great significance. Low energy prices can also attract manufacturing investment flows to the United States, driving the rust zone of energy-supported industries such as the development of the steel industry. According to the IHS Energy Department forecast, by 2020, the US shale oil and gas industry should support 3.3 million jobs, cutting the $ 164 billion trade deficit (IHS, 2013). In the Trump government focused on the development of energy policy, the Sino-US energy trade cooperation between the huge space.

Texas is the traditional oil-producing state, where the seats in the House are highly influential, and former Texas Governor Perry is the energy minister of Trump Cabinet. In recent years, Texas's rapid growth in China's energy exports in 2016, Texas, China's exports of oil and gas products reached 1.2 billion US dollars, almost four times in 2014. China can continue to strengthen its energy trade with Texas and consider expanding its imports of Texas energy technology and services, which will help ease US trade deficit with China and improve trade relations between China and the United States.

In addition to crude oil, Sino-US natural gas trade also has great potential. Increasing the share of natural gas and other clean energy in the energy mix is ​​one of China's goals in energy reform, and energy reform programs include the opening of oil and liquefied natural gas imports to China's private sector. The future of China is likely to become a natural gas pipeline and liquefied natural gas import power. US open natural gas export ban, the first time in 2016 China imported liquefied natural gas from the United States, the future there is still much room for growth. In addition, from the US point of view, if China's dependence on the Russian natural gas pipeline energy import model, will largely reduce the US global energy policy and East Asian policy prospects. So China to strengthen the North American shale gas export state trade cooperation there are geopolitical factors.

Enhance energy trade and infrastructure cooperation with the northern part of the state energy

With the development of shale oil, the US energy map has appeared upside down, in addition to South Texas and other traditional energy states, northern North Dakota has become a new source of energy, as previously communicated southern Gulf Coast region and in Central refining area and the construction of energy infrastructure, energy transportation can not meet emerging needs. The gap between the energy map changes and infrastructure caused by the inefficient allocation of resources. North American crude is still using railroad transport in an industrial era, and about one third of the natural gas produced in North Dakota is burned even because it can not be transported (Bordoff, 2013). If the United States wants to fill the gap between energy map changes and infrastructure construction, it is necessary to expand and upgrade transport infrastructure. Although the US energy infrastructure needs a lot of money, but it is difficult to fully implement the funds, while the transport infrastructure is due to a longer return cycle, financing is also a problem.

From this level, China and the United States not only in the energy trade has a lot of room for cooperation in the North American state energy development and transportation areas also exist opportunities for cooperation. According to the American Chamber of Commerce estimates that by 2030, the United States at least 8 trillion US dollars of infrastructure investment, about 57% of energy projects, including oil and gas infrastructure demand is as high as 2.8 trillion US dollars, the second is the traffic project, accounting for about 36% (US Chamber of Commerce, 2013). Although China's investment in the United States will be scrutinized by CFIUS, Chinese-funded enterprises can implement a lucrative green investment in the policy environment, that is, with the US joint venture, or with the long-term accumulation in the US market, Chinese-funded enterprises. In addition, despite the existence of WTO government procurement agreement and the rust state employment protection restrictions, China's infrastructure materials are still due to price advantage and the existence of competitive opportunities. For example, the New York Department of Transportation in 2012 used the Chinese supplier in the Verrazano-Narrows Bridge project, primarily because it was $ 235 million lower than US suppliers.

The gap in the US energy infrastructure sector has also created obstacles to energy exports. US port size and production efficiency are lower than the world average, while the US part of the legal policy has also caused the US infrastructure industry closed and inefficient. For example, the Jones Act, which requires ships to be shipped between two US ports, is made for US-made, US-owned, US crew operations, severely weakening US energy and shipping capacity, while Chinese-made vessels can significantly reduce shipping costs , Hong Kong, China's port infrastructure logistics ranks the world's top level. These questions are no doubt in the United States Congress, but need to work further to build the basis of mutual trust between China and the United States. For example, in order to promote Sino-US energy cooperation, the proposed shipping for US-China energy trade purposes allows special use of Chinese-made vessels or joint ventures with US and Hong Kong.

Improve the service industry to the outside world

Although the US trade deficit with China is relatively large, but China's trade in services has been a deficit, and year after year growth. US exports to China's service industry in the past five years, an average annual growth rate of 16%, the future growth potential. From another point of view, due to the degree of openness of China's service industry is lower than the manufacturing sector, also led to slower growth in service industry productivity. Improving the opening up of the service industry is conducive to improving domestic economic growth and also reducing the trade imbalance between China and the United States.

The focus of the service sector is on the areas of tourism, software, engineering services, transportation, parenting and other market competition. In addition, should also be appropriate to open the financial industry. After joining the WTO, China's financial industry is limited in its openness, for example, the proportion of foreign banks to total assets of China's banking sector is 1.5% in 2003 and 1.34% in 2015 (China Banking Regulatory Commission, 2016). The further opening up of financial markets will help to improve the productivity of China's financial services, including the removal of restrictions on foreign shares, the strengthening of transparency of laws and regulations. In the cultural industry, you can increase the protection of intellectual property rights, increase the film and other products such as import quotas.

Sino - US trade friction counter – measures

Sino-US trade friction, China in the WTO filed a total of 15 appeals, of which 10 against the United States, most of the United States is unreasonable against the two countermeasures. Other counter measures are more in the United States to raise tariff barriers, the same type of reciprocal retaliatory measures. For example, in 2009, the Chinese Ministry of Commerce launched an anti-dumping investigation against broiler chickens imported from the United States for imposing tariffs on tires imported from China by the Obama administration. An important reason for American broilers is that Chinese poultry products have not been able to enter the US market for many years. Although the United States is more sensitive to agricultural products, but the overall amount of agricultural trade is not high, 2016 US exports to China billions of dollars of poultry and meat, far less than soybeans, cars and aircraft industries more than 10 billion US dollars of exports amount. From the effectiveness of the counter, the following industries are much more lethal.

Soybeans

According to Chinese Minister of Commerce Zhong Shan pointed out that the United States 56% of soybean exports are sold to China. China's imports of soybeans from the United States in 2015 exceeded US $ 12 billion. Among the major soybean growing states in the United States, Illinois has a higher trade volume with China, with $ 1.6 billion in exports of agricultural products to China in 2015, with higher political influence and 18 seats in the House of Representatives. Followed by Minnesota, which exported $ 901 million to China's agricultural products by 2015 and eight seats in the House of Representatives. This allows China to use soybeans as an important tool for influencing Congress.

Admittedly, because the short-term domestic soybean substitutes are limited, and from the United States, Brazil and Argentina imports of soybeans is a seasonal division of labor factors, so the reduction of soybean imports will inevitably raise the price of domestic soybean is not conducive to domestic consumers. However, due to the US political environment is more sensitive to the agricultural sector, and Trump particularly need to protect the Midwest farmers (his main supporters), so a limited degree of import reduction may also form an effective counter-style.

Car

China is the world's largest car market. In 2016, China imported from the United States car and car chassis worth more than 12 billion US dollars. As the auto industry's added value is high, and the brand is highly substitutable, for the US auto industry to take trade counter measures, has always been a common means of China. For example, the Chinese Ministry of Commerce announced in 2011 that the United States imported cars to implement two years of anti-dumping and countervailing duties, although later the United States appeal to the WTO, but the WTO to resolve the proceedings of a long period of time until the termination of the trade sanctions after the ruling. From this point of view, although the implementation of trade remedy measures for the US auto industry is not an ideal choice under the framework of the WTO, but the Trump government deliberately against China under the premise, it may well be an effective tool.

Aircraft

China is Boeing's largest overseas market. In 2015, US exports to China totaled more than $ 113 billion, of which only Boeing reached $ 24.6 billion, or about 22%. According to the Boeing "Current Market Outlook" report, China's air passenger traffic is expected to grow at an average annual rate of 6.4% over the next 20 years, and China's domestic aviation industry will surpass North America in the next 20 years to become the world's largest aviation market. The report predicts that China's demand for new commercial aircraft over the next 20 years is 6800, worth $ 1 trillion. According to the current Boeing in the Chinese market about 50% of the share, which means about 500 billion dollars in revenue. If the Boeing aircraft sanctions, not only Airbus can fill the supply gap, the Chinese-made aircraft will have more market space. And then the United States lost not only Boeing's huge orders, there are more jobs. Boeing spokesman Doug Adler said that if the US Department of Commerce formula, that is, every one billion US dollars of exports in the United States to create about 6,000 jobs, then from Boeing's exports to China, the Chinese market for the United States to create a 15 Million jobs. This has a great deterrent to the Trump government, which aims at creating "manufacturing employment".

Rare earth

China's rare earth supply accounts for 90% of the world, is an important strategic material, in the military and electronics industries have a wide range of applications, for the US high-tech industry is essential. In view of the rare earth export quota system and the WTO conflict, China is now turning to the use of resource tax system to avoid excessive exploitation of rare earth. However, if the Trump government also abandons the WTO rules on China's unfair trade policy, China can still be in the framework of the WTO to implement counter-measures, such as the use of WTO disputes to resolve the appeal period and reasonable execution period (Reasonable Period of Time, RPT ) To implement Efficient Breach operations, that is, the use of WTO rules to limit the rare earth exports but in the allowed time interval to take the initiative to correct (Harvard Law Review, 2011). While the use of this measure would undermine the credibility of China's maintenance of multilateral rules, it would not preclude the use of extreme counter-measures in the United States.