US-China conflicts will persist, says Beijing ex-finance minister

Former minister Lou Jiwei is now an official with a body that advises China's Parliament.
Former minister Lou Jiwei is now an official with a body that advises China's Parliament.

BEIJING • A Sino-US trade war could ease somewhat but wider conflicts between the world's two largest economies will continue, Mr Lou Jiwei, a former Chinese finance minister, said yesterday.

"Look at the next development. There could be compromises in the trade war at a certain stage, and we have seen signs of compromising," Mr Lou, now an official with a body that advises China's Parliament, told an economic forum in Beijing.

Officials from both countries last Thursday said that China and the United States had agreed to roll back tariffs already put in place on each others' goods if a "phase one" deal was concluded, but the idea has been met with opposition from some quarters of the administration of US President Donald Trump.

Mr Trump himself, in comments that hit stock prices and the US dollar, said last Friday he had not agreed to a tariff rollback.

Washington has adopted a strategy to contain China's economic rise by preventing the country from climbing up the global value chain, Mr Lou said.

"Containment and counter-containment are inevitable and that will be a long-term issue," he said.

But Mr Lou also said it would be difficult for the US to decouple from China, given the potential disruption to global supply chains and the impact on businesses.

The US tariffs on Chinese exports will not fundamentally resolve its trade deficit, which is caused by the high US government debt ratio and a low household savings rate, he said.

China should open up its economy wider to foreign investors, but it should not rush to relax its capital controls, Mr Lou said.

A version of this article appeared in the print edition of The Sunday Times on November 10, 2019, with the headline 'US-China conflicts will persist, says Beijing ex-finance minister'. Print Edition | Subscribe