Uncertainty clouds China-US ties

Xi on globalization

At this week's World Economic Forum held in Davos, Switzerland, President Xi Jinping was in the spotlight for his support for globalization, open trade and combating climate change, in sharp contrast to the anti-trade message from the incoming Trump administration.

Douglas Paal, vice-president for studies and director of the Asia program at the Carnegie Endowment for International Peace, believes raising tariffs against China will be hard, due to opposition in Congress. House Speaker Paul Ryan, a Republican, said early this month that "we're not going to be raising tariffs".

But Paal said the Trump administration will be looking for progress with China in market access or intellectual property rights. "Overall, the message will be 'it's not good enough, we need a better situation' in our bilateral relationship," Paal said.

Trump's accusation of China being a currency manipulator has drawn rebuke from Fred Bergsten, an economist at the Washington-based Peterson Institute for International Economics. Bergsten, a sharp critic of China's currency policy years ago, is now saying that "China is no longer manipulating its currency."

Many US economists share that view, saying the Chinese government is actually propping up its currency, known as yuan or RMB, from falling, thereby helping the US economy become more competitive.

"It would thus be factually incorrect, as well as ineffectual, for the new Trump administration to label China a currency manipulator," Bergsten said.