Positive signal for trade talks with US

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Positive signal for trade talks with US

2020-08-24

Source: Global Times    Published: 2020-08-23


China has approved plans by US-based asset manager BlackRock Inc, together with Singapore's Temasek Holdings and China Construction Bank Corp (CCB), to establish an asset management joint venture in China, a move industry observers said sends a positive signal ahead of a much-anticipated call between China and the US over the phase one trade agreement in the coming days.


But the approval represents one more step by China in opening up the financial sector to international firms, analysts said.


The growing rift in bilateral ties over the Trump administration's multi-faceted attack on Beijing has inflated uncertainties hanging over the talks, in particular the extent to which certain issues of mutual concern could be addressed, experts say. It could also pose barriers to the phase one trade deal's implementation if bilateral relations sink to new lows.


China's banking and securities regulator announced over the weekend that in the first half of 2020, it approved the launch of an asset management joint venture by BlackRock, Temasek and CCB as part of the country's financial opening-up efforts, according to a statement on the regulator's website.


In addition, US-based insurer Chubb increased its share in Huatai Insurance Group Co in the first half, taking the firm's holding in the company to 46.2 percent from 30.9 percent, making the US firm the largest shareholder, the statement noted.



Wang Yiwei, director of the International Affairs Institute at the Renmin University of China, told the Global Times Sunday that the approval shows China is committed to implementing the phase one trade deal despite souring bilateral relations.


"Beijing is keeping a cool head, in stark contrast to Washington, which politicizes everything and displays toughness on China as the US presidential election looms," Wang said. Analysts also noted that US financial institutions are eager to set up JVs in China, in anticipation of a swift economic rebound.


Gao Lingyun, an expert at the Chinese Academy of Social Sciences, who follows the trade talk closely, told the Global Times Sunday that the approval is significant for the upcoming trade consultations.


"But more importantly, the establishment of the JV is based on China's own pace of opening-up, showing the world China's pledge to financial opening-up despite the COVID-19 epidemic and US President Donald Trump's threats of decoupling from China," Gao said.


China's Ministry of Commerce (MOFCOM) said Thursday that Chinese and US officials will hold trade talks in the "coming days." The MOFCOM did not provide further details, such as the topics and the specific time.


The talks, which would be held for the first time since the phase one trade deal was signed in mid-January, are widely expected to offer a chance for both sides to review the implementation of the agreement, which also includes pledges for China's financial opening-up.


Washington has been using "maximum pressure" tactic on China in recent months over a range of issues ranging from the coronavirus pandemic and Hong Kong affairs to relentless crackdowns on Chinese tech firms including Huawei, Tik Tok and WeChat.


In response to US sanctions on 11 officials from Hong Kong and the Chinese mainland, China's banking and securities regulator issued a rare harshly worded statement Saturday. It criticized the US move of abusing long-arm jurisdiction and using financial hegemony to impose unilateral sanctions.


"The atmosphere is tense ahead of the call, creating uncertainties on how the remaining ssues will be discussed," Gao noted.


He disclosed that both sides are preparing documents for the upcoming call. The documents will list the status of the trade deal's implementation and explanations of why certain aspects are behind the targets.


From August 7 to 14, China bought 2.3 million tons of soybeans, according to data provided by the US Soybean Export Council.


Wang Yiwei is a senior fellow of Chongyang Institute for Financial Studies at Renmin University of China.