The US and China Building Mutual Trust Benefits the Global Economy

Communist China’s Vice President Xi Jinping smoothly completed his trip to the U.S., having received a high-level reception in Washington. The itinerary, carried out under a special backdrop, did not contain unexpected exclamation points, nor did it leave behind new questions. Instead, it resembled line after line of direct statements, simple, but transparent and plain, which is precisely what the currently shaken global economy needs most.

On the surface, Xi Jinping’s trip to America completed reciprocal visits between the U.S. and China’s vice heads of state, and was a response to U.S. Vice President Biden’s arrangements on his trip to Beijing in August of last year; however, because Xi Jinping is the internally appointed heir apparent of mainland China, he holds a particularly special position. The timing of the visit also coincided with disagreements between the U.S. and China over human rights in Tibet, events in Syria, etc., as well as increasing friction and imbalance in bilateral trade — last year, mainland China’s trade surplus with the U.S. reached a record-setting $295 billion — making the meeting of the two sides especially meaningful.

In the past few years, friction in trade between the U.S. and China has steadily increased. Since Obama took office, the U.S. has brought approximately twice as many trade cases against China as the previous administration, and has continually accused mainland China of artificially manipulating the RMB exchange rate. Obama has clearly stated that he will strengthen penalties for unfair trade, and will also establish a new panel to investigate unfair trade practices, both of which are directed at mainland China.

On a more abstract level, Xi Jinping’s trip is also considered a public appearance, allowing Americans to get acquainted with the CCP’s new leader, and then finding a new position for the next 10 years of U.S.-China relations. In accordance with the CCP’s system of government, barring extraordinary circumstances, Xi Jinping will lead mainland China until 2023, and [during his term as president] will most likely experience the historical moment of China surpassing America to become the world’s largest economy. America’s high-level reception is unquestionably a forward investment in a bilateral relationship that will be [America’s] most important in the future, but whose manner of development is yet unknown. For Beijing, America’s first impression of Xi Jinping is also an opportunity to show America mainland China’s new image and new way of thinking. Fundamentally, Xi’s visit to America holds implications of helping the U.S.-China relationship transition from the old to the new, subsequently being described as “the trip of rebuilding.”

From the high level of anticipation prior to the trip to its calm conclusion, Xi Jinping’s performance was entirely by the book. Because he has not yet risen to the presidency, this is not surprising; furthermore, the U.S. and China will both face political successions this year. At a time when stability takes precedence over all else, the relationship between the two nations cannot be changed to any large degree. Of special note are the U.S. and China’s restraint in their use of strong language, America’s lack of authoritative undertones and China maintaining its poise, showing the value placed on Obama and Xi Jinping’s first meeting; when no news is good news, the considerable amount of positivity in the U.S. and China’s interaction this time is a taste worth savoring.

As described by the White House prior to the event, the Obama-Xi meeting focused on relations between the two nations, regional development and global issues, while issues on trade were the key point of the talks. Both sides also issued their “Joint Fact Sheet on Strengthening U.S.-China Economic Relations” after the meeting, mainly expositing the two countries’ consensus on their bilateral trade relationship and coordination of economic policies. Compared with the vague declarations of strategic principles made in the past, this “fact sheet” shows concrete action. For example, [China’s] opening of mandatory liability insurance for motor vehicle accidents to foreign-invested insurance companies, albeit a small step, is a vow by mainland China to open its financial markets to foreign [investment]; as to America, it makes Chinese banks subject to the same prudential and regulatory treatment as other countries’ banks when doing business in the United States. Additionally, aside from pledging [the continuance of] existing economic cooperation, jointly addressing the European debt crisis and promoting reform in the exchange rate system, the nations also promised to push for economic changes. This is precisely the crucial foundation which will bring about the development of a virtuous cycle in the U.S. and China’s economic relationship.

Consequently, despite the fact that Xi Jinping’s visit to the U.S. did not result in any breakthroughs on important issues, it made headway on promoting the two sides’ establishment of a cooperative partnership [based on] mutual respect, and mutual benefit. Among other things, the reception which Xi Jinping himself received from America showed his personal ability in managing important issues in U.S.-China relations, and also had the effect of bolstering his position in [China’s] internal leadership; for the U.S., [the meeting] increased its understanding of Xi Jinping’s personal style and was a step toward understanding China’s stances and policy approaches on related bilateral and multilateral issues.

On the whole, high-level dialogue between China and the U.S. is beneficial to decreasing mutual suspicion, avoiding errors in judgment, increasing trust, relieving the tension in the two sides’ relationship and even stabilizing the regional security situation, etc. In the future, one can hope that U.S.-China relations will develop under a framework of both competition and cooperation.