The China-U.S. economic and trade meeting in Geneva has achieved substantive progress, resulting in a substantial reduction in bilateral tariff levels and sending a powerful ripple through global markets.
What deeper significance lies behind this China-U.S. joint statement? To explore the question, Xiakedao, a public WeChat account operated by the People's Daily, sat down with Professor Zheng Yongnian, one of the key opinion leaders on political and economic topics related to China and also the president of the Institute for International Affairs, Qianhai, at the Chinese University of Hong Kong (Shenzhen).
We are translating this conversation, which was originally conducted in Chinese, and presenting it to our readers.
Zheng:
The joint statement is generally very positive news. It is not only good news for both China and the U.S. but also for the whole world. That's why before the statement was released, the Director-General of the WTO also welcomed it. From China's perspective, when China engages in negotiations with the U.S., what China is actually discussing is not just matters between the two countries, but also China's international and global responsibilities. Although further negotiations are still needed, returning to rational consultation is always a very good starting point. The world not only pays attention to the specific content of the negotiations between China and the U.S. but also to how, through rational negotiations, China and the U.S. can shape new solutions for the governance of the world economy. The governance of the world economy cannot be achieved by a single country alone. Only by embracing openness and shouldering the responsibilities of major countries, while including, rather than excluding others, especially developing countries, can we devise solutions for future global development. In this sense, this phased achievement is very good.
Zheng:
As we said before, when the trade war erupted, both countries needed to test their economic resilience. Frankly, China's economy held up better. China was also affected, but the U.S. felt the pain more broad.
Some time ago, China's exports to the U.S. declined, and many ordinary Americans, especially those in the middle class and below, were immediately affected by high inflation in their lives. The MAGA movement claims to protect the interests of workers, but the wanton imposition of tariffs actually harms the interests of workers, triggering rapid downturns that are slow to reverse. With midterm elections looming, pressure built on the White House. That's why we saw that before the negotiations, the White House had already spread the word through various channels that negotiations had been ongoing. Of course, many of these were false messages.
I think one good thing about this is that through negotiations, China and the U.S. may build a new plan for the future world economic order. In the 1980s, the U.S. and Japan reached the Plaza Accord. At that time, Japan surrendered and was knocked down at once. Even though the U.S. won, such an agreement that only takes into account unilateral interests is doomed to be unsustainable, and the problems faced by the U.S. still exist, and a more reasonable solution has not been reached through the agreement. But China will never surrender. Although the next stage of negotiations will still be very tough, everyone has recognized China's strength.
The imbalance of the world economy is a reflection of the internal economic imbalance of major countries. I have been thinking that the realistic background of the White House's wanton imposition of tariffs is still there, how will the world economy develop in the future? Most likely, the internal economies of major countries need to be rebalanced. For example, 60%-70% of economic growth comes from domestic sources, and 30%-40% depends on trade and other means. These issues should be considered from the perspective of the future of the country and the world economy right now. Building a foundation for the future order through this negotiation is the key.
Zheng:
It proves that China's first step of reciprocal countermeasures was absolutely correct. As the Americans say, either at the negotiating table or on the menu. If you surrender, you'll definitely end up on the menu. Right now, China is not only at the negotiating table, but there are also many other countries standing with China. If everyone surrenders to unilateral bullying, there will be no rationality in this world. Someone has to stand up and say that hegemony is unreasonable, and that's why China's approach has won the support of so many countries. It has played this stage very brilliantly.
China is not just acting for itself. It is also striving for justice in the world.
We must recognize this. The China-U.S. agreement will affect both countries and will also have an impact on future negotiations between China and other countries, as well as between the U.S. and other countries. Its significance is very profound. As we said before, the U.S. tariffs are a tool, not a goal, because such high tariffs are actually an embargo, making it impossible to do business. Now, returning to rationality is a major opportunity for China. Historically, whether it is the trade system of dividing into camps or the globalization of neoliberalism, it has been proven that they are not feasible. So what about the future? How should the rules of the WTO be changed? How should China participate in the formulation of these rules?
Zheng:
Last year, China's exports to the U.S. topped 520 billion U.S. dollars – a 4.9 percent year-on-year rise, despite more than eight years of White House-imposed trade barriers and "decoupling" efforts. That enormous trade volume underscores how deeply intertwined the two economies remain and suggests that U.S. reindustrialization, nearshoring, and "friendshoring" initiatives have not met expectations.American businesses still have vast interests in China: when tariffs spared their bottom lines, they stayed on the sidelines; once their costs climbed, tech giants such as Google, Apple, and NVIDIA's Jensen Huang moved quickly to lobby. A broad coalition of stakeholders is now pushing for a return to rational, predictable trade relations.
Many factors favor China, but success won't simply drop out of the sky. Beyond economics, the geopolitical stakes run deep: although the joint statement focuses on trade, its strategic implications are profound.
Containment and suppression pressures will endure. Among U.S. hardliners are "war hawks" who argue "now or never" to defeat China, and "realists" who recognize China's rise yet seek to compete by choking its access to key technologies.
Beijing and Washington must press on with further equal-footed consultations-from fentanyl regulation to rare-earth exports-and the U.S. cannot credibly treat China as an "enemy" on one front while demanding cooperation on another.
The views don't necessarily reflect those of BeijingReviewDossier.
