China’s slowing economy offers ‘magic moment’ to accept US trade war demands, says ex-US trade chief

Carla Hills, USTR under George H.W. Bush, urges China to take long-term gamble on economic reform, despite short-term pain of industrial job losses

Other US and European trade figures advise China and the United States to make a deal of substance to avoid ‘very worrying’ trend towards economic decoupling

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Carla Hills, former US trade representative under President George H.W. Bush, called on China to make sweeping economic reforms. Photo: Handout

Finbarr Berminghamin BrusselsandCissy Zhouin Hong Kong

Published: 8:13pm, 30 Oct 2019Updated: 10:32pm, 30 Oct 2019

China should seize the current “magic moment” in its history by opening up its economy to give its people the “growth they have been promised”, according to the United States’ former top trade official.

Carla Hills, who was US trade representative under president George H.W. Bush, said that China’s slowing economy offered Beijing a rare opportunity to grant some of Washington’s top demands on market access, a level-playing field for American firms in China, and “strong, articulate, clear, transparent” intellectual property laws.

“When you're negotiating, you really have to understand the other side of the table and try to work with them,” Hills told the South China Morning Post in Shanghai. “I think that China and the United States have a magic moment right now, because China's economy is slowing, and they simply must get the growth that has been promised to their people. They're going to have to move more readily to a supply consumer style economy from the heavy industry, and state-owned enterprises.”

To galvanise this transition, which has been underway for the best part of a decade, China should be more open to US investment and more accommodating of investors’ needs, including protecting technology and nurturing collaborative research and development, said Hills, who negotiated a series of trade and tech agreements with former Vice-Premier Wu Yi – known as China’s “iron lady” – in the early 1990s.

I think that China and the United States have a magic moment right now, because China's economy is slowing, and they simply must get the growth that has been promised to their people

Carla Hills

Her comments come at a difficult moment for the Chinese economy, which reported the lowest official growth rate on record for the third quarter this year, at 6.0 per cent. However, a report released on Wednesday by financial research firm MorningStar said that its “alternative broad proxy indicated China’s economic growth was merely 3 per cent in the third quarter”, with greater “tariff shocks” to come in the final quarter of the year.