U.S. and Chinese economic chiefs sidestepped their differences over North Korea and steel imports ahead of a high-level forum in which the Trump administration is seeking clear commitments from China to open its markets.
“There remains serious imbalances which we must work to rectify,” Commerce Secretary Wilbur Ross said Tuesday in Washington at an event organized by the U.S.-China Business Council, a nonprofit group representing more than 200 American companies that do business in China. “It is time to rebalance our trade and investment relationship in a more fair, equitable and reciprocal direction.”
Ross spoke at the gathering along with U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Wang Yang, a day before the U.S.-China Comprehensive Economic Dialogue, or CED, in Washington. The forum for economic and trade talks was agreed to in April, when President Donald Trump met his Chinese counterpart Xi Jinping in Florida and developed a 100-day action plan. The talks led to China re-opening its markets to U.S. beef and pledging to buy U.S. liquefied natural gas, while allowing greater access to its financial services sector.
The meeting comes amid tensions between the two nations as Trump steps up pressure on China to rein in North Korea’s nuclear program. His administration is also weighing steps to cut steel imports, blaming China’s overcapacity for creating global gluts.
Mnuchin on Tuesday said the U.S. wants specific deliverables from the CED and that the U.S. will use the discussions to push China on lifting foreign ownership restrictions in its financial services industry and to remove hurdles for information and technology sectors.
“China is in the midst of a change to a more sustainable growth model,” Mnuchin said. “We still have work to do with China to achieve a balanced relationship” based on reciprocity.
The Chinese government has been giving market-oriented policies a larger role in the economy, moving away from a state-led model, with a goal to achieve 6.5 percent average economic growth in the five years through 2020.
“The Chinese economy will continue to grow at medium-high speed and climb higher on the value chain, as China’s traditional industries are transformed and upgraded at a faster pace and emerging industries flourish,” Wang said in a speech at the event.
While Trump built a positive rapport with Xi during the April meeting at his Mar-a-Lago resort in Florida, there are signs of growing friction as the U.S. pushes China to reduce North Korea’s nuclear threat.
The U.S. president in June said China hadn’t done enough to control North Korea and its nuclear weapons program, though he appeared to brush over differences from that threat and about trade issues during the Group of 20 meeting earlier this month.
In a move that threatened to raise tensions, Mnuchin last month took steps to penalize a Chinese bank, a Chinese shipping company and two Chinese citizens to reduce North Korea’s access to the international financial system. Mnuchin said at the time that the measures were “in no way targeting China” but instead focused on “North Korea’s external enablers.”
The sanctions provoked a furious response from China, with a foreign ministry spokesman saying the measures violated understandings reached during the Mar-a-Lago meetings.
While Trump has put trade tensions on the back burner -- at least publicly -- if his patience runs out on China he could revive the threat of escalating trade spats.
The administration has decisions pending on the national security implications of importing steel and aluminum that could lead to quotas or tariffs, as it blames China for creating excess capacity with production of the metals at record highs.
Wednesday’s CED replaces the Strategic and Economic Dialogue, which was formalized during the Obama administration, and the longstanding Joint Commission on Commerce and Trade. Both have drawn criticism for involving too many people and producing too few results.
On the sidelines of the talks, Ross met with top chief executives including Alibaba Group Holding Ltd. Chairman Jack Ma, Stephen Schwarzman of Blackstone Group, Tom Hayes of Tyson Foods Inc., General Electric Co. Chairman Jeffrey Immelt and Sinochem Group Chairman Frank Ning.
In their public remarks on Tuesday, Ross, Mnuchin and Wang were focused on areas of cooperation. Mnuchin left out any mention of Chinese investments in the U.S., which has sparked concern from the administration and Congress over China’s interest in purchasing stakes in nuclear weapons businesses, semiconductor companies and other critical infrastructure.
Ross downplayed any friction on Tuesday, saying the U.S.-China relationship is better today than in many decades and the countries have “fundamentally shared objectives.”