Coronavirus: US-China blame game prompts Beijing hawks to ramp up criticism of phase one trade deal

Hours after top negotiators finished up their first teleconference since the US-China phase one trade deal was signed in January, a blog thought to have ties to officials in Beijing published an aggressive attack on Washington’s perceived muddying of the agreement with the row over coronavirus. A few days later, the Global Times – a tabloid newspaper published by the People's Daily, the Communist Party's mouthpiece – published an English language-only article saying “sources close to the Chinese government” and “a former Chinese trade official” were “calling for new negotiations and a tit-for-tat approach on spiralling trade issues”. Neither outlet said the trade deal, barely a few months old, was doomed. Indeed, both trumpeted the importance of the accord. But the articles show the division that the phase one deal has sewn in Beijing. As in Washington, the deal was not without its detractors in China, even during the negotiating period, as indicated by the dramatic collapse in talks last May, when perceived hardliners in Beijing reacted after seeing the proposed text of the deal for the first time. Worsening US-China ties over the spread of coronavirus this year have not helped change the minds of the naysayers, even if few believe the Chinese government is serious about renegotiating. Instead, the coronavirus dispute has given a platform for hawks on both sides of the agreement...The business end of the trade deal is also not progressing according to plan. China is well behind on its purchasing targets outlined in phase one, which commits it to buying US$200 billion more US products over two years than it did in 2017. Data wire Agcensus reported that Cofco and Sinograin, China’s state-owned soybean crusher and stockpiler, have started to buy soybeans in bulk in recent weeks, including 400,000 metric tonnes this week alone and 2.3 million metric tonnes since April 20. But other products have not fared so well, with purchases of corn and wheat slowing after a small spike in March and ethanol purchases behind 2017’s baseline levels. Purchases have “tailed off as the US rhetoric around who is responsible for the Covid-19 outbreak has ramped up,” Agcensus said. “China’s purchases of US products so far this year are running below levels in either 2017 or 2019. The gap is large for soybeans, transport equipment, and energy. China is still buying sophisticated manufactured products, such as electrical and specialised machinery, at rates higher than we have seen in the past. This might be because China has fewer alternatives to US products for specialised equipment,” read a report from S&P Global on Wednesday...MORE