(Yicai Global) April 18 -- Despite growing trade conflicts between China and the US, trade tensions between the two countries might subside if Beijing recognizes the need to open its economy to foreign competition, former US Treasury secretary Henry Paulson said.
“The Chinese are prepared to have some concrete market openings, structural reforms and other steps that, particularly if they could accelerate the timeline a bit, would be a win for both countries,” Paulson told Yicai Global at a China Institute executive summit in New York. “And that’s where this current tariff impasse should end, and I actually think will end.”
Though China has kept pushing through reforms, these have slowed and even stalled of late, making it difficult for US firms to compete on a level playing field, he added. He called for the two nations to talk to set a timetable for China’s opening-up, saying trade wars will hurt both economies.
“The frustration in Washington -- in Congress and the Trump administration -- is understandable because it arises from business frustration and from public anger,” Paulson continued. “The economic relationship which benefits both sides, and has benefited both sides for a while, is in my judgment way out of balance.”
He did not elaborate on why he believes reforms have slowed and even stalled in China.
China will substantially expand market access in its financial, automotive, shipbuilding and aircraft industries, create a more attractive investment environment, strengthen intellectual property rights protection and increase imports, Chinese president Xi Jinping pledged at the 2018 Boao Forum for Asia held April 8–11 in the town of the same name in China’s southern resort island province of Hainan.
China’s development and reform agency is working with government agencies to draw up a new negative list for foreign investment to help put in place novel measures to open the domestic economy as quickly as possible, such as lifting foreign ownership curbs on the new energy vehicle, shipbuilding and aircraft industries.
Paulson also praised the economic team formed in Xi’s recent leadership reshuffle.
“Liu He and the whole economic team is first rate,” Paulson said. “So now that he’s got them in place, he has got a much better ability to deliver and to get things done that benefit both [the US and China] and there are a lot of areas of complementarity and shared interest."