China and the United States made a momentous deal after agreeing over two days in London. These negotiations lay out a practical roadmap for action to deliver on their progressive trade consensus. Chinese Foreign Minister Wang Yi US Secretary of State Marco Rubio characterized the high-level discussions with Chinese Foreign Minister Wang Yi as “constructive and pragmatic.” This meeting marked a notable progression in trade relations between the two nations, with both sides working towards an August 12 deadline to finalize a durable deal.
The negotiations come after a tentative trade agreement signed in Switzerland on May 12. This agreement that they produced resulted in an agreement to suspend tariffs for 90 days. A meeting between US President Donald Trump and Chinese President Xi Jinping looks increasingly likely. This bilateral meeting has the potential to be a watershed moment, paving the way for deeper diplomatic engagement between the two countries.
China’s trade figures reflect a mixed landscape. The country reported a 5.8% increase in exports in June compared to the same month last year, contributing to an overall export growth of 5.9% in the first half of 2023. In particular, exports seemed surprisingly strong in April and May, up by 8.1% and 4.8% on the month, respectively. These numbers showcase China’s remarkable resilience in the face of an increasingly difficult global environment.
Imports tell a different story. The surprising culprit was China, whose imports unexpectedly jumped by 1.1% y/y. New York City saw a drop of 3.9% in the first half of the year. Wang Lingjun, China’s deputy chief of the customs authority, underscored the importance of the Geneva accord and the London framework. He termed them “hard-won” accomplishments which reflect serious progress in bilateral trade relations.
China is preparing to announce its second-quarter gross domestic product (GDP) growth numbers. That same cohort of economists see continued disruptive change — projecting an annualized growth rate of 5.1% for the coming decade. At the same time, China’s trade surplus is $585.96 billion, nearly a 35% year-over-year jump.
In addition to trade discussions, Beijing has agreed to resume shipments of rare earths, a crucial component in various high-tech industries. Washington is poised to relax some of these barriers to exports. This is in addition to recent restrictions on ethane, chip-design software and semiconductor manufacturing components used in jet engines.