Thursday, May 3, 2018

As U.S. and Chinese Teams Meet on Trade, One Side Has an Edge in Expertise

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Both countries have played down the possibility that the negotiations will resolve the simmering tensions between them. Still, Chinese officials’ lack of experience in international trade law could make it even harder for the two sides to find common ground before the talks end on Friday.

“We’re in a situation where the ministry of commerce doesn’t have all the people in place that it wants to have,” said James Zimmerman, a former four-time chairman of the American Chamber of Commerce in Beijing, citing the Chinese agency that traditionally handles trade matters. “I really think they are unprepared for the negotiation that is taking place.”

Chinese officials dispute that characterization, saying the reorganization will not hurt a stance that they describe as tough but of flexible.

“I don’t think it is a problem, or that this process of organizational reform will affect the ability to negotiate,” Li Gang, the vice president of the Chinese commerce ministry’s research and training academy, said in a recent interview.

The new team of top Chinese negotiators, few of whom come from the commerce ministry, is led by Liu He. Mr. Liu, an economist by training, is a close adviser and longtime friend of President Xi Jinping. Senior Chinese officials and their advisers spoke about economic policy at a three-day Tsinghua University seminar that ended on Monday. Most of them insisted on anonymity for reasons of diplomatic sensitivity.

Those attending the seminar said that Chinese negotiators had a warm relationship with Steven Mnuchin, the Treasury secretary who is a member of the American delegation and a former Goldman Sachs executive. He was described as easy to talk to.

Chinese officials said they felt less of a connection to the rest of the group, which includes, among others, Robert E. Lighthizer, the United States trade representative, who was described as brusque by people on the Chinese side; Peter Navarro, a top trade adviser and longtime critic of China; Larry Kudlow, who leads the National Economic Council; and Wilbur Ross, the commerce secretary.



[Read about the divisions on the American side of the table during high-level trade talks in Beijing.]


Many of the negotiators representing the United States are more comfortable than their Chinese counterparts with the fine points of trade policy. Mr. Lighthizer, for example, has been immersed in trade issues continuously since the Carter administration, working closely throughout with Mr. Wolff, and has taken a harder stance.

By contrast, after a series of bureaucratic reorganizations in recent months, many of China’s top trade negotiators are now economists and bankers with little practical experience in trade matters. The commerce ministry’s two main officials for trade talks with the United States, veterans who have negotiated with Washington since the 1990s, were each awarded ambassadorships last year and dispatched to Europe.

One senior Chinese official at the seminar who insisted on anonymity said that there was deep frustration among his colleagues that, when the two sides have talked in the past, American negotiators have continually raised details about Chinese trade practices and international trade laws, while those on the Chinese side preferred to discuss a coherent economic strategy.

Chinese policymakers are also annoyed about the number of United States agencies involved in the talks. Officials in China are accustomed to dealing with the Treasury, which coordinated American economic policy toward Beijing for nearly two decades. They are less accustomed to dealing with the office of the United States trade representative, which has consistently tilted toward more assertive policies and has a prominent role under President Trump.

The senior Chinese official said that he missed the old Treasury-led team every day, and Chinese officials have suggested regularly this year that the United States revive that approach. Doing so could allow Treasury to take charge again, even though United States law says the trade agency should be in charge of trade issues.

On the Chinese side, the rise of economists and bankers is part of a broad reshuffling meant to consolidate the Communist Party’s political power.

As part of the reorganization, China’s commerce ministry was broken in March into three separate groups each focused on different issues. The ministry’s office of trade negotiations still exists and has numerous trade lawyers, but people involved with the negotiations say the shuffling has robbed the office of resources and support.

But even the trade negotiations office has effectively been sidelined by a Communist Party group led by Mr. Liu. The group, now called the Central Commission on the Economy and Finance, was originally intended to bring the country’s debt under control. To accomplish that, Mr. Liu, who was educated at Harvard, has hired dozens of economists and bankers, men and women in their 30s and 40s with graduate degrees from the most highly regarded economics departments and business schools in China and the West.

What the commission largely lacks are trade lawyers.

Chances that the talks would yield major progress appeared slim on Thursday. China’s official news agency, Xinhua, reiterated Beijing’s stance that should a trade war break out, the country was better prepared thanks to its centralized leadership, strong domestic consumer base and its greater desire to protect the current structure of trade.


At the seminar over the weekend, Chinese officials also struck a defiant tone. Peng Guangqian, a retired major general who remains an influential military strategist, said, “President Trump wants to curb our development.”


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Heavy burden on Amir as Pakistan rebuild Test side

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Pakistan coach Mickey Arthur is hopeful that the time of the year will help them overcome the loss of legspinner Yasir Shah for the Tests against Ireland and England.

Yasir has taken 89 wickets in the last two years - more than double Pakistan's next most successful bowler in the period - but was ruled out of this tour due to a hip injury. Shadab Khan, the 19-year-old legspinner, who has impressed with the white ball but has played just one Test, has huge shoes to fill although there remains a chance Pakistan will decide to go without a specialist spinner given the early-season conditions which are likely to prevail.

There has been a significant decline in Pakistan's Test fortunes since the shared series against England in 2016 which helped them to the No. 1 ranking. They are now languishing at No. 7 following series defeats against New Zealand, Australia and most recently Sri Lanka - their record with Arthur as coach is 11 defeats and six wins from 17 Tests - and are going through a transitional phase following the retirements of batting stalwarts Younis Khan and Misbah-ul-Haq.

There are four uncapped batsmen in the squad and the absence of Yasir has shorn Pakistan of a senior figure with the ball while also leaving them with their least experienced spin attack to face England in at least 40 years.

"Any team would miss Yasir," Arthur said ahead of the team's first warm-up match against Kent. "He has the ability to hold the attack and control the game. Shadab is incredibly exciting but also I am not sure that spin is going to be a huge factor given it's early season in England, so we have covered ourselves in the seam department. But Shadab can clean tails up because he has all the tricks. It is going to be exciting to see how he goes.

"Yasir is a big loss but we have him at the National Cricket Academy [in Lahore] and he is getting fit, his stress fracture is healing and it's really important for us to have him fit and firing for the Australia and New Zealand series later in the year."

Pakistan's bowling attack will rest heavily on Mohammad Amir, who arrived in the UK on Wednesday having been granted his visa after a short delay. Two years ago he made his return to Test cricket at Lord's, following his spot-fixing ban, and since then has not earned the rewards his bowling has often deserved with 44 wickets at 37.25. How Pakistan catch will be a critical factor, with Amir suffering significantly from missed chances, although there is also a belief in the team management that the amount of white-ball cricket he has played has led him into bowling too short with the red ball.

"He's our No. 1 bowler, we back him in tough situations. He generally gets it done for us," Arthur said. "We need him to get the ball swinging, we need him to get his length slightly fuller and if he gets that he's going to ask a lot of questions."

Amir's workload has also become a topic of debate in recent times, with the indication that he may sit out some Test cricket to preserve him for the 2019 World Cup and beyond. Arthur said that Pakistan have "three weeks off" between now and the World Cup, leaving a balancing act between building a new era for the Test side while keeping an eye on the demands of the limited-overs game.

"We have had the workload debate for a long time now and every team has to do the same. We only have three weeks off in our calendar now before the World Cup next year, so we'd be silly not to arrive here with our bowlers fit and we know who they are - we have identified them - so we just have to manage them because ultimately want the best team to play in that 2019 World Cup.

"But also for us it is so important to win Test matches - we are a young team and we need to get our Test team right and to do that we have to build a core of players who can play at any given time. We are trying to resurrect our Test side, we feel we've got our white-ball cricket where we need it now, so we are really excited about this series, really excited to see these young guys come out and perform. There's some incredible talent in our dressing room, so let's hope it all goes well for us."




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