US-China's 100-day economic action plan makes headway even as diplomatic rifts widen

US President Donald Trump and Chinese President Xi Jinping (right) shake hands prior to a meeting on the sidelines of the G20 Summit in Hamburg, Germany on July 8, 2017.
US President Donald Trump and Chinese President Xi Jinping (right) shake hands prior to a meeting on the sidelines of the G20 Summit in Hamburg, Germany on July 8, 2017. PHOTO: REUTERS

WASHINGTON (AFP) - Three months after US President Donald Trump hosted a lavish welcome for his Chinese counterpart Xi Jinping at his Florida resort, the powers have made headway on an ambitious economic plan even as diplomatic rifts between them have widened.

Speaking in Paris last Thursday (July 13), the American leader was full of praise for Mr Xi, proclaiming him a friend for whom he has great respect, a great leader and a very talented man.

The expressions of admiration have gone both ways. A day earlier, Beijing's foreign ministry spokesman Geng Shuang had hailed positive advances in China-US economic cooperation based on a spirit of consensus between the two leaders.

Both sides see moderate progress on a wide-ranging 100-day economic action plan, first unveiled at Mr Trump's Mar-a-Lago estate in April that covers such areas as financial services, investment, energy and trade - a topic close to the US president's heart.

Analyst Evans Revere at Brookings Institution said: "Both sides seem to share the view that the 100-day plan is largely on track."

Mr Jake Parker, vice-president of the US-China Business Council in Beijing, largely agreed: "Overall, the 100-day outcomes are positive first steps addressing lingering issues in the US-China commercial relationship."

He added that more needed to be done to address structural issues such as foreign investment restrictions.

But despite the effusive rhetoric, that progress has not been matched in other areas of the relationship with ever widening rifts on a host of foreign policy issues.

The US appears bitterly disappointed over China's failure to exert pressure on North Korea in the wake of its first ever intercontinental ballistic missile test, while Beijing has been left fuming at American incursions into disputed territory in the South China Sea, arms sales to Taiwan and statements on human rights.

Mr Trump made China a central part of his presidential campaign, denouncing the country for unfair trading practices that cost Americans jobs and accusing it of manipulating its currency.

Since becoming president, however, he has taken an about turn on the currency issue and in May announced a deal to export American beef and gas to China in the hope of reducing a massive trade deficit that totalled US$347 billion (S$476 billion) in 2016.

These first results from the 100-day plan will likely be feted at the US-China Comprehensive Economic Dialogue that will be held on July 19 in Washington, hosted by US treasury and commerce secretaries Steven Mnuchin and Wilbur Ross and Chinese vice-premier Wang Yang.

But in other contentious areas of the relationship - tensions in the Korean peninsula, China's maritime disputes with its neighbours, Taiwan and human rights - "the two sides are far apart", said Mr Revere.

The US has scolded Beijing for not putting enough pressure on North Korea, which increased trade with its key diplomatic backer by 10.5 per cent in the first half of this year.

The July 4 launch of an intercontinental ballistic missile by Pyongyang signalled that Mr Trump's "naive experiment regarding China and North Korea is now coming to an end", said Mr Revere, vindicating foreign policy experts' scepticism towards relying on Beijing to rein in its neighbour.

As evidence of the shift, Mr Revere cited US sanctions on Chinese entities such as the Bank of Dandong, which is accused of illicit dealings with companies linked to the weapons program, days before the launch.

Tensions have also been stoked by the passage of a US warship near a reef claimed by Beijing in May and two B-1 bombers over disputed waters this month (July), acts denounced by China as grave military and political provocations.

Washington meanwhile approved a US$1.3 billion arms deal to Taiwan, an island which Beijing considers a rebel province awaiting reunification.

The developments appeared to have been acknowledged by Mr Shuang as "negative factors" in the relationship brought about by "actions of the US".

On the thorny question of human rights, statements from the US State Department have come pouring in - calling on China to respect Hong Kong's freedoms, desist its crackdown on lawyers, or condemning Beijing for the death in custody Nobel peace prize winner Liu Xiaobo.

As for Mr Trump's continuing habit of praising the Chinese leader, Mr Revere believes it stems largely from "a desire to keep the door open in case Beijing changes its posture vis-a-vis North Korea, as well as to try to keep the US-China relationship on a steady course".