China played the long game to see who ‘blinks first’ when US trade war spiralled out of control in 2018, central bank’s ex-adviser says
- David Li Daokui, former member of Chinese central bank’s monetary committee, said US and China have had series of false starts in talks to avert trade war
- Two sides need a monitoring mechanism and a protocol for regular dialogue, Tsinghua University professor Li said
China’s government, locked in disputes with the nation’s biggest export market, was playing the long game and waiting to see who “blinks first” when a trade war between the world’s two largest economies spiralled out of control last year, a former adviser to the Chinese central bank said.
Negotiations to resolve the disputes went into a six-month hiatus due to several false starts caused by lack of understanding, said Tsinghua University’s economics professor David Li Daokui, a former member of the monetary policy committee of the People’s Bank of China.
“China was patient, and was not eager to reach a deal in [the period between] May and November” last year, Li said at Credit Suisse’s Asia Investment Conference in Hong Kong, recounting a December 2018 phone call with the Chinese head of state Xi Jinping. “Let’s see who blinks first,” he recalled Xi as saying.
Talks between the two nations – with US$630 billion of commerce between them last year – were halted for six months in 2018 after a team led by US Treasury Secretary Steven Mnuchin left Beijing empty-handed in May.
Li does not mince his words when it comes to US trade negotiators. The American trade envoys, especially US Trade Representative Robert Lighthizer, was a “team of barking dogs” who were “perceived to be overly aggressive, unnecessarily aggressive by the Chinese general public,” he said.
“You have to show respect. Otherwise it does not work,” Li said.
