Why this is important to Wisconsin businesses: The agreements, which cover aircraft, automobiles, soybeans, liquefied natural gas and more, dispel fears of a trade war.
President Trump visited China from Nov. 8 to 10 as an integral part of his 12-day visit to Asia. During this visit, the two countries signed contracts and two-way investment agreements worth more than $250 billion, including the purchase of Boeing aircrafts, Ford automobiles and U.S. soybeans, as well as joint development of liquefied natural gas in Alaska. “The fruitful contracts indicate that the Sino-U.S. economic and trade relationship is not only a stabilizer for bilateral relations, but also a vital driver for global economy," said Diao Daming, associate professor with Renmin University of China.
"China is gradually shifting from 'buy from America' to 'invest in America,' which is in line with both nations' interests," said Shou Huisheng of the Center for China and Globalization, a major Chinese think tank. Shou said that although economic frictions exist, the two countries can work together to avoid problems.
The deals signed during the Xi-Trump Summit cover 34 cooperative projects involving energy, chemicals, environmental protection, culture, medicine, infrastructure, smart cities, and construction in countries along the Silk Road Economic Belt and 21st Century Maritime Silk Road.
“Being the world's biggest developing economy and developed economy, China and the U.S. are highly complementary rather than competitive,” Xi said when meeting with business delegates from both countries. "We are willing to expand imports of energy and farm produce from the U.S. and deepen service trade cooperation. We hope the U.S. will increase exports of civil technology products to China. We will continue to encourage Chinese companies to invest in the U.S. We also welcome U.S. companies and financial institutions to participate in the 'Belt and Road Initiative'." Xi reaffirmed China's commitment to openness and reform, and said China will not close its door to the world, but will do the opposite. Companies with overseas investment, including those that invest in the U.S., will enjoy a more open, transparent and standardized market environment within China.
Following Trump’s visit, China announced it will substantially relax the foreign ownership rules for its financial sector, which has been a long-standing goal of U.S. trade diplomacy. The changes would allow a foreign stake of up to 51 percent in Chinese securities, funds and futures companies, and remove the cap altogether by 2020. China will also allow foreign stakes of up to 51 percent in Chinese insurance companies by 2020, and remove this cap by 2022.
Although there are still problems to be solved between China and the U.S. in terms of trade, a $250 billion deal indicates extensive support from industries and businesses on both sides, and suggests that the two superpowers have potential for more economic cooperation. Many say the outcomes of this visit have greatly eased recent concerns about a trade war.