Tribune. The Trump administration launched a trade war against China in 2018 with the aim of achieving structural reforms to the Chinese economic model. On arrival, with the “Phase 1” agreement between Washington and Beijing, signed on January 15, 2020, the exact opposite happened: the American administration took note of a Chinese system of administered trade , to take advantage of it.
The inclusion in this approach of manufactured products, in addition to agricultural and energy goods, constitutes the great innovation of this agreement – and it will impact businesses in a Europe which must draw the consequences. The 96-page document (including appendices) signed by President Donald Trump and Deputy Prime Minister Liu He on January 15, deals in its first chapters with structural issues – intellectual property protection and technology transfer. But it remains on this level at the level of assertions of principles, referring to possible concrete application mechanisms later.
The agreement is concrete, and in the short term, on the issue of financial services. On this point, despite appearances, the "concessions" made by China are to its advantage.
A major innovation
The broad possibilities for American companies to enter the Chinese financial market – including with the establishment of asset management companies (Assets Management Corporations) responsible for buying bad debts – goes in the direction of Chinese objectives, which seek to increase funding sources to relieve a deeply destabilized national banking sector with these non-performing loans.
If the American financial giants want to buy back the "rotten debts" that are undermining the Chinese system, good will do them in the vision of the Chinese authorities, who are going to great lengths to maintain the country's financial stability.
But the agreement becomes very concrete – and quantified, and therefore subject to controls -, and to the advantage of the United States, on the question of bilateral trade. The 200 billion dollars (179.20 billion euros) of additional Chinese imports of American goods and services over two years, compared to their level of 2017, are the main concrete element of this agreement. And this presents a major innovation compared to the previous ones: agricultural (+ $ 32 billion over two years) and energy (+ $ 52.4 billion) products which served as the traditional adjustment variable in Sino- American, add 77.7 billion dollars in manufactured products (the balance of 37.9 billion dollars to arrive at 200 billion returning to the services), belonging to a list annexed to the agreement.
