Business is booming in the background on Trump’s China visit
The agreements, some of which were less than firm contracts, signed at a ceremony attended by Trump and his Chinese counterpart, Xi Jinping
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The agreements, some of which were less than firm contracts, signed at a ceremony attended by Trump and his Chinese counterpart, Xi Jinping, included the purchase of U.S.-made chipsets, jetliners and soybeans. The two sides agreed to co-operate on a gas project in Alaska they valued at $43 billion and a shale gas demonstration project valued at $83.7 billion.
Chinese Commerce Minister Zhong Shan said deals signed Thursday totalled $253.4 billion. That was on top of $9 billion in agreements signed Wednesday at an event attended by U.S. Commerce Secretary Wilbur Ross.
Such contract signings are a fixture of visits to Beijing by foreign leaders and are intended to defuse foreign complaints about China’s trade surpluses and market barriers. They often represent purchases that Chinese mobile phone makers, airlines and other companies had already planned to make, but waited for the visit to announce, which would mean they do little to change the trade balance.
Trump has made narrowing the U.S. trade deficit with China—$347 billion last year—a priority. Ross said Wednesday that was a “central focus” of his talks with Xi.
The American Chamber of Commerce in China said ahead of Trump’s visit that it welcomed such contracts but expressed concern Trump’s focus on trade in goods might mean he pays less attention to equally important issues such as complaints about restrictions on access to finance, health care and other industries in China’s state-dominated economy.
Following the signing ceremony, Xi promised a more open business environment for foreign companies after Trump vowed to change unfair trade relations.
Xi said China is committed to further opening its economy to foreign investment, though he gave no details.
“China will not close its doors and will open even wider,” said Xi. He said American and other foreign companies would find China’s market “more open, more transparent and more orderly.”
Previous administrations have celebrated similar market-opening promises only to be left disappointed.
Business is booming
Contracts signed Thursday included the Chinese purchase of Boeing Co. jetliners for $37 billion, mobile phone chipsets from Qualcomm for $12 billion, $1.6 billion of soybeans and vehicles and parts from General Motors Co. and Ford Motor Co. for a total of $11.7 billion.
The state of Alaska took a major step toward realizing a long-sought pipeline to move natural gas from the North Slope to Asia, courting interest from China after major oil companies stepped back from the project.
The agreement Alaska Gov. Bill Walker signed in Beijing with Sinopec, China Investment Corp. and the Bank of China does not guarantee a pipeline will be built, but it gives the lingering liquefied natural gas project a jolt of life.
“This is the market responding, and we’re very, very pleased with that,” Walker told reporters in a teleconference from Beijing.
The agreement was signed as both U.S. President Donald Trump and Chinese President Xi Jinping watched. No financial terms were released, but it’s been estimated that the project could cost $43 billion.
Other agreements included memoranda of understanding on liquefied natural gas sales and industrial development co-operation.
Contracts signed Wednesday included a commitment by China’s biggest online retailer, JD.com., to buy $1.2 billion of American beef and pork.
China’s trade surplus with the United States in October widened by 12.2 per cent from a year earlier to $26.6 billion. The total surplus with the United States for the first 10 months of the year rose to $223 billion.
China is the No. 3 export market for the United States after Canada and Mexico. U.S. exports to China rose 77 per cent from 2007 to 2016 but Washington reported a $347 billion trade deficit with China last year.
Trump’s administration also is investigating whether Beijing improperly pressures foreign companies to hand over technology.
Xi said China is willing to expand imports of LNG, crude oil and other U.S. energy products and would explore “the potential” of more imports of American beef, cotton and other agricultural products.
It was also unclear if these pledges extend beyond a U.S.-China trade agreement announced in May that featured LNG and beef exports to China, which trade experts called a modest fulfilment of past assurances made by China.