Each country should be free to formulate diverse policies: expert

A group of 37 scholars from China and the US jointly issued an initiative on "China-US Economic Relations" on Sunday, stressing competitive coexistence between the two countries and saying that bilateral economic relations have reached a "very concerning turn."

The joint proposal, issued in Shanghai by scholars including five Nobel Laureates for Economics, offered an alternative intellectual framework on the basis of mutual benefit, dismissing calls for "convergence" and "decoupling."

The statement said that the conflict and stalemate in US-China relations have been grounded in a preception that presumes the only feasible possibilities going forward are either deep economic integration of the two economies or substantial "decoupling" of them.

The new framework demands more freedom for both China and the US in formulating diverse industry policies, technology systems and social standards.

It also urges the two countries to adopt precise policies (tariffs and non-tariff) to protect their chosen industries, technology and social policies, while avoiding the creation of unnecessary or asymmetrical burdens on trade partners.

In addition, it suggests the establishment of a set of economic and trade rules in case any country seeks to benefit at the expense of others.

Ju Jiandong, director of the Center for International Economic Research at Tsinghua University, joined the draft of the advocacy. He told the Global Times on Sunday that in order to find a feasible framework for resolving China-US trade disputes through negotiations, four Chinese scholars and six US scholars formed a working group.

"The structural characteristics of US-China relations and the world economy means that 'competitive coexistence' in the world order is practical," Ju said.

The US and China should reinforce mutually beneficial policies, Ju said. "The two countries should increase international trade in sectors where they have advantages. For example, China can cut tariffs for US agricultural exports and the US can cut tariffs for Chinese textiles."

As for competing policies, Ju said that "policies that support companies' efforts to develop better products should be allowed, while policies aimed at damaging each other's research and production should be prohibited."

Ju said, "The diversity of each country's system should be allowed and protected amid globalization."

The scholars also include Justin Lin Yifu from Peking University; Yu Yongding, an academician and senior fellow of the Chinese Academy of Social Sciences; Huang Yiping, an economist at Peking University; Eric Maskin, Nobel laureate in economics and professor at Harvard University, and Robert Howse, professor at NYU.

Wang Jun, deputy director of the department of information at the China Center for International Economic Exchanges, said that the academics' proposal is intended to promote reconciliation between China and the US. Since it was made by top-level academics both in China and abroad, the proposal should have some impact on the negotiation teams of the two countries.

But Wang stressed that the Trump administration's policies are not based on reason but on political considerations.

"Donald Trump is currently vexed by multiple factors, including political issues such as impeachment threats and presidential election uncertainties, as well as downward pressure on the US economy. If those pressures accelerate further, it might help push China and the US to reach a compromise in their current trade contradictions," he said.

Trade talks breakthrough

The release of the statement comes at a significant time, when China-US trade talks seemed to have been deadlocked due to the US going back and forth. For the first time, China appeared to indicate that a partial trade agreement with the US may be within reach, as it affirmed over the weekend that technical consultations on part of the text have been broadly completed.

However, analysts remain cautious over the progress as the US may go back on its word. They said that the phase one agreement, if signed, may take care of both sides' core interests and pave the way for further negotiations.

Chinese Vice Premier Liu He discussed key trade issues with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in a phone call on Friday.

The two sides agreed to properly handle their core concerns and affirmed that technical consultations on part of the agreement text have been broadly completed, a statement on the Chinese Ministry of Commerce's website said on Saturday.

This is the first time for the Chinese side to signal that a partial agreement may be within reach.

However, even if a preliminary deal can be achieved, more issues such as alleged subsidies to state-owned enterprises and US curbs on China's high-end manufacturing development need to be resolved in later talks, Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation in Beijing, told the Global Times.

"The current China-US economic relationship is far from returning to its normal status, where trade conflicts are solved through economic dialogue instead of tariffs," Bai said, noting that "we should hold a wait-and-see attitude toward the progress."