Beijing Trumpets U.S.-China Trade Plan as Summit Nears

By Chuin-Wei Yap and Mark Magnier Features Dow Jones Newswires

A broad plan to reset trade relations with the U.S. gave China a choreographed diplomatic success ahead of a summit of world leaders here this weekend, as both countries avoided some of the stickiest issues of the relationship.

Continue Reading Below

Beijing on Friday mirrored the Trump administration's announcement of measures to make it easier for a variety of American exports to enter China, with an emphasis on agriculture, financial services and energy.

The plan struck a tone of cooperation after a bruising spiral of retaliatory sanctions and mutual trade complaints. Coming a month after Presidents Donald Trump and Xi Jinping met in Florida, it allowed China to depict Mr. Xi's team as skillful at negotiating with a new American administration that has pledged to take China to task over its trade practices.

However, some wordings were vague, and much of the progress outlined had appeared to be already under way. A clear deadline for China to lift a ban on U.S. beef was new, after Chinese Premier Li Keqiang said last year that China would "soon" resume imports of beef. The U.S. Meat Export Federation said it welcomed the plan.

The lifting of the ban, imposed in 2003 over "mad-cow" concerns, comes amid exploding Chinese demand for beef. China's growing wealth has made it the world's fastest-growing beef market, with consumption more than 20 times what it was five years ago.

"China can't develop herds to meet the demand that's developing," said David Mahon, managing director of Mahon China Investment Management, a Beijing-based private-equity firm.

Continue Reading Below

Some foreign companies in China called the trade plan a missed opportunity for the U.S. to address fundamental market-access issues for Western firms in China.

"This move from China is a step in the right direction, but it's just symbolic," said Ker Gibbs, chairman of the American Chamber of Commerce in Shanghai. He said foreign players would continue having a hard time gaining traction in China.

The announcement comes as Mr. Xi gets ready to showcase his flagship trade project -- the One Belt, One Road plan to build roads, pipelines and ports across a vast swath of the globe -- to leaders of around 30 countries in Beijing. The project has come to symbolize China's message that it is committed to open trade.

Chinese officials on Friday highlighted a mention of the initiative in the U.S. and Chinese statements about the new trade plan. China said Matthew Pottinger, the White House's top Asia expert, was expected to attend the gathering, which starts Sunday.

The statements failed to mention larger trade differences, such as the effect of China's excess in industrial capacity on global employment and markets. The U.S. last month ordered national-security probes on imports of Chinese steel and aluminum. The relationship has also frayed over Chinese chip makers' challenges in stepping up investment in the U.S. and U.S. accusations of Chinese hacking and other cybersecurity concerns.

Beijing cast the plan as an illustration of its willingness to further open its own markets, rather than a concession to Washington's pressure to narrow China's $347 billion trade deficit with the U.S.

Potentially the largest concession by Beijing was on U.S. soybeans and corn, with China saying it would speed up clearance for genetically modified crops it uses for animal feed. The statement was short on details.

Chinese chicken exporters also welcomed the plan, which could end limits on the poultry-product trade on both sides. "It has great potential," said Zou Wenlong, an analyst with the Nine-Alliance Group, a Chinese association of exporters, though he added his group would keep a close watch for continued signs of trade protectionism.

China banned U.S. chicken imports, including chicken claws considered a delicacy in the Asian market, after a 2014 bird-flu outbreak; the U.S. has intermittently limited Chinese poultry imports because of health standards.

The U.S. already sells more agricultural products to China than it buys, at $21.4 billion in 2016, according to U.S. data. Chinese agricultural exports to the U.S. totaled about $10 billion.

The countries' statement also included a goal of opening China's market in electronic payments. China's monopoly bank-card issuer, China UnionPay Co., continues to dominate the market as China has largely ignored a U.S. win in 2012 on the issue at the World Trade Organization.

Visa said Friday it "looked forward to submitting an application for a bank-card clearing institution license" as a result of China's latest commitment to open the market. MasterCard's spokesman Venture Liang said it looked forward to "full and prompt market access in China."

There was little in the statement for financial-services firms looking for a clear amendment of Chinese rules that shackle them to domestic partners, from credit rating to bond underwriting.

"It's a one-off, not a structural opening up of China or a trade deal," said Jörg Wuttke, president of the European Chamber of Commerce in China.

Pei Li and Chao Deng contributed to this article.

Write to Chuin-Wei Yap at chuin-wei.yap@wsj.com and Mark Magnier at mark.magnier@wsj.com

(END) Dow Jones Newswires

May 12, 2017 10:15 ET (14:15 GMT)