$340b US-China deals may not fix trade balance

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Nov 10, 2017 06:00 am

BEIJING American and Chinese officials proudly touted US$250 billion (S$340 billion) worth of deals yesterday, signed during US President Donald Trump's trip to Beijing, but analysts said the headline figures will not do much to rectify a lopsided trade balance.

Mr Trump's presidential campaign was built in large measure on lashing out at global trading relationships, particularly that with China, whose annual US$350 billion deficit he said proved the US was being taken for a ride.

NON-BINDING

But the many agreements inked yesterday were little more than non-binding memorandums of understanding, which can take years to materialise or simply fall apart.

"It is old-style politics, where a leader comes in and you scoop a bunch of deals which were already under way, or you put out a big number to show the relationship is strong," said China chairman James McGregor of consultancy APCO Worldwide.

One of the most substantive agreements is a gas deal between Alaska state, Alaska Gasline Development, China Petrochemical, China Investment Corporation and Bank of China. Officials said it will reduce the trade deficit by US$10 billion annually. - AFP