Three signs from APEC that the US, China remain at a distance on trade

SUZHOU, China — Just a week after the US and Chinese presidents met in Beijing, the world’s two largest economies are sending different messages about their priorities in Asia.

First is the pricing.

China’s economy relies heavily on imports — and on free-flowing trade — as it accounts for about 28% of global goods, according to CNBC’s calculations of World Bank data.

Beijing’s statements by Chinese President Xi Jinping and US President Donald Trump’s conference last week indicated that jobs will remain low for a long time, while the US did not mention tariffs.

Then on Saturday, China’s Minister of Commerce Wang Wentao told reporters that strengthening the “idea” of the free trade agreement is an important result of the recently concluded meeting of trade ministers of the Asia-Pacific Economic Cooperation.

“In the face of increasing uncertainties and damaging factors in global and regional economic development, members re-directed their attention to the FTAAP (Asia Pacific Free Trade Area) by committing to continue to advance economic integration through the FTAAP program,” Wang said in Chinese, according to the official English version.

However, when CNBC the other day asked a member of the US delegation about FTAAP and free trade, the answer focused on equal trade, which is part of the Trump administration’s reasons for the tariffs.

“The FTAAP is, in fact, more of a regional arrangement,” said Casey K. Mace, Senior US Executive at the APEC Forum. He noted that the US is “working” on FTAAP elements such as competitiveness, labor standards and trade facilitation.

China will host this year’s APEC meetings, which will culminate in November with a high-level meeting in Shenzhen. Trump and Xi are expected to meet around that event.

The second is what is next for the US and China.

There are few details yet on how the two sides will move forward through “constructive strategic stability,” except for China’s purchase of 200 Boeing jets and $17 billion a year in US agricultural products through 2028.

A Chinese reading released early Saturday said Wang met Thursday in Suzhou with Rick Switzer, the US Deputy Trade Representative and head of the US delegation to the APEC trade ministers’ meeting.

The reading said the two sides hoped to reach an agreement soon on the details of the economic results from the Trump-Xi meeting – an indication that differences remain.

The US embassy in Beijing and the US State Department did not immediately respond to a request for comment.

The third is the expansion of the US and Chinese technology race into Asia.

The APEC trade ministers’ meeting reached a “new consensus” on digital trade cooperation, Wang said.

When asked to elaborate, Lin Feng, director-general of China’s Ministry of Commerce’s department of trade and economic and international relations, noted plans to make it easier for e-commerce companies to do business in the region, as well as a “commitment to strengthen AI-related trade.”

Lin noted efforts to “bridge the digital divide” but did not specifically mention China’s AI companies.

While the US has limited the ability of Chinese companies to access advanced semiconductors to train AI models, Chinese businesses tend to release cheap – if not free – AI models for use, and capabilities that narrow the gap with their US competitors.

On the US side, Mace emphasized plans to “continue to position US technology companies, digital companies, as leaders in the region.”

Mace said US tech firms will be holding workshops during APEC’s “digital week” in Chengdu in July. While China is the host of the event, “the opportunity to communicate with all 21 [APEC] economics,” he added.

The US is one of the 12 founding members of APEC, which was launched in 1989 in Australia as an informal forum for negotiations on free trade and economic cooperation. The international trade organization now has 21 members, including mainland China, Hong Kong and “Chinese Taipei,” which joined the forum in 1991.

Wang did not comment on the “urgent official business” that prevented him from chairing the opening session on Friday.