Beijing Needs Progress in Trade Talks with US for Its Own Political Reasons, Analysts Say

June 30, 2019 Updated: June 30, 2019

Trade talks between China and the United States have resumed following a meeting between the leaders of the two nations in Osaka, Japan.

U.S President Donald Trump agreed not to impose tariffs on an additional $325 billion of Chinese-manufactured goods, while the two sides would restart negotiations.

“Basically, we’ve agreed today that we’re going to continue the negotiations, which I ended a while back,” Trump said during a press conference on June 29, following a meeting with Chinese leader Xi Jinping on the sidelines of the G-20 summit in Osaka.

Wu Qiang, a former political science lecturer at China’s prestigious Tsinghua University spoke to Radio Free Asia (RFA), analyzing why the trade war truce was critical for Xi, for it was an acceptable deal for both the trade hawks and trade doves within the Chinese Communist Party.

“It was an acceptable diplomatic achievement. Xi was able to achieve limited results this time around, but the truth is that it was urgent for him to reach an agreement,” Wu said.

Wu elaborated that there is urgent political pressure for Xi to gain some results before the upcoming political meeting known as the Fourth Plenary Session of the 19th Central Committee, which is usually held in the fall.

The meeting is for top Chinese officials from the Central Committee of the Chinese Communist Party, a group of Party elite that consists of 205 members and 171 alternate members. Generally, seven plenary sessions are held within the five-year tenure of Central Committee members.

The Second Plenary Session was held in January 2018, followed by the Third a month later.

There was speculation that the Fourth Plenary Session would be held in October last year but the meeting never materialized. Since then, there has been much speculation as to why the meeting has been pushed off, with many pundits arguing that it has to do with divisions within the Party.

“Any setback in the Sino-U.S. relationship, or a continued stalemate in the trade negotiations, would be a serious challenge to Xi’s political status,” Wu said.

He Jiangbing, a Chinese economist and social media commentator, also said in an interview with RFA that he did not foresee the trade war ceasefire as permanent. If trade talks do not go well in the future, Trump would likely move forward with the tariffs he had threatened to place on an additional $325 billion of Chinese imports.

Feng Chongyi, associate professor of China studies at the University of Technology Sydney, explained that there is an inherent need for Beijing to reach a trade deal, in an interview with the Chinese-language Epoch Times.

“Now the Chinese economy is not doing well. More tariffs would mean more companies moving out [of China], which would lead to a further dip in the economy, and a higher unemployment rate,” Feng stated.

Concerned with how a poor economy could lead to social instability, Beijing would agree to some U.S. demands in trade negotiations in order to safeguard Party rule, Feng explained.

He added that Beijing likely plans to drag on the trade talks until there is an indication of whether Trump would be re-elected in the 2020 U.S. presidential elections.

Follow Frank on Twitter: @HwaiDer