China and the United States signed the long-awaited phase-one trade deal on Thursday morning Beijing Time, signaling a thaw in economic and trade relations between the world's two largest economies after nearly two years of trade friction.
The deal, agreed in mid-December following a dozen rounds of negotiations led by China's top trade negotiator Liu He and US Trade Representative Robert Lighthizer, was signed by US President Donald Trump and China's Vice-Premier Liu He at a ceremony at the East Room of the White House, which was attended by about 200 representatives from business, government and diplomatic circles.
The vital trade truce, which came 22 months after trade tensions flared between the world's top two economies in March 2018, has been widely expected to help reduce uncertainties that have dampened business investment moods in both countries and beyond.
Under the deal, China will increase imports of US agricultural products, and the US will gradually eliminate its tariffs on Chinese goods.
The deal covers intellectual property rights, technology transfers, food and agricultural products, financial services, exchange rates and transparency.
The signing of the phase-one deal will be beneficial to both countries and help bolster the global economy, analysts said. They also urged that concerted efforts be made to resolve potential uncertainties in the future.
Wei Jianguo, vice-president of the China Center for International Economic Exchanges in Beijing, said, "The conclusion of the pact benefits consumers and companies in both China and the US, and will help restore confidence in the foundering world economy."
The deal proves that the two economies complement each other and that cooperation is the best choice for them, he said.
Looking ahead, it may be inevitable that China and the US will "step on each other's feet", but the conclusion of the phase one deal will lead to dialogue in more fields and at deeper levels, Wei said.
Liu Liu, a macroeconomics researcher at China International Capital Corp, a leading investment banking firm, said that because the pact was concluded, "trade between China and the US will pick up".
"In general, the easing of Sino-US trade frictions will reduce external uncertainties and benefit global trade and the world economy," Liu said.
Consumer demand is expected to improve at home and abroad this year, along with trade growth, while the exchange rate of the yuan will have more support from improving fundamentals, he said.
Between November and December, growth of China's imports from the US recovered some. US shipments to China rose by 9.1 percent year-on-year to reach 78.83 billion yuan ($11.46 billion) in December.
Exports of US agricultural products to China reached 14.1 billion yuan last month, climbing 200 percent year-on-year. In the same month, China imported 23,000 automobiles from the US, up 150 percent from the same period a year earlier.
Bi Jiyao, deputy director of the Academy of Macroeconomic Research of the National Development and Reform Commission, said potential challenges persist this year, and coping with them will require more effort.
Also, protectionism may reignite, which, together with pending reforms of the World Trade Organization, will make it difficult for companies worldwide to make long-term investments, Bi said.
On Tuesday, before the signing of the deal, Vice-Premier Liu He said that Beijing and Washington will work together to obtain tangible results going forward, according to Xinhua.
Liu told International Monetary Fund President Kristalina Georgieva and some US representatives during a meeting in Washington that the deal would benefit both countries and the world.
Liu also said China and the United States can work together in a win-win relationship despite differences in their political and economic models.
US President Donald Trump and Chinese Vice Premier Liu He, who is also a member of the Political Bureau of the Communist Party of China Central Committee and chief of the Chinese side of the China-US comprehensive economic dialogue, show the signed China-US phase-one economic and trade agreement during a ceremony at the East Room of the White House in Washington D.C., the United States, Jan. 15, 2020. (Photos: Xinhua)
US President Donald Trump and Chinese Vice Premier Liu He, who is also a member of the Political Bureau of the Communist Party of China Central Committee and chief of the Chinese side of the China-US comprehensive economic dialogue, show the signed China-US phase-one economic and trade agreement during a ceremony at the East Room of the White House in Washington D.C., the United States, Jan. 15, 2020.
US President Donald Trump and Chinese Vice Premier Liu He, who is also a member of the Political Bureau of the Communist Party of China Central Committee and chief of the Chinese side of the China-US comprehensive economic dialogue, show the signed China-US phase-one economic and trade agreement during a ceremony at the East Room of the White House in Washington D.C., the United States, Jan. 15, 2020.
(With input from China Daily)