China-US trade talks: "Let's hope for the best but prepare for the worst"

CGTN Europe

CGTN Europe interviewed Victor Gao, Vice-president of the Center for China and Globalization in Beijing

Transcript

00:00Well Victor Gao is the Vice President of the Center for China and Globalization in Beijing.

00:06Victor Gao, welcome back, good to see you.

00:08They're all being very tight-lipped in London, I must tell you.

00:11We're not hearing much from the United States.

00:13I don't suppose you know what's going on from Beijing, do you?

00:17Thank you very much.

00:18No, we are all looking for the result to be announced.

00:22I think the whole world is holding its breath to see what exactly will happen between the two delegations.

00:28So let's hope for the best, but prepare for the worst.

00:32Okay, well what does the best look like?

00:34What would be a good outcome from these talks from China's perspective?

00:39Well, the best scenario we can expect is that census and rationality come back to Washington,

00:46and Washington no longer decides to weaponize tariff or weaponize trade to achieve other motivations.

00:54between China and the United States trade will be normalized, and tariffs, if any, will be minimum,

01:01rather than becoming an embargo of Chinese exports to the United States,

01:07or highly prohibitive against US exports to China.

01:12So that will be the best case.

01:14I think the two sides still have a good chance to achieve a rational and normalized trade relations between China and the United States,

01:23the two largest economy in the world.

01:26Rare earth minerals remain, it seems, a major sticking point in these talks.

01:31I wonder how critical are these resources for China's trade strategy and come to that global influence?

01:40Well, I think the Chinese side has made it very clear that rare earth materials are a dual use materials.

01:48It can be used for civilian purposes as well as for military purposes.

01:53China most likely will have no problem in relaxing restrictions on the exports of the rare earth material

02:00to buyers which can use them for civilian purposes, including car makers in the United States.

02:07But I suspect China will continue to exercise a restriction, if not maximum restriction,

02:14if these rare earth materials will be used for military purposes.

02:19Because I think it will be highly ironic if China walks into a situation where its rare earth materials exported to the United States

02:28will be used for military purposes to build weapons or missiles or stealth planes,

02:34which the United States eventually may use to attack China.

02:38This will be the maximum irony that China wants to avoid.

02:43Negotiations are about doing deals, the art of the deal, to misquote an author,

02:49finding the middle ground perhaps.

02:52What would China compromise on in these discussions?

02:56Well, China's position has been consistent.

02:59If the United States is serious about negotiations, about minimizing, reducing the tariffs,

03:06China's door will be open and China will use its maximum flexibility to talk to the United States.

03:12But if the United States wants to continue with the trade war or the tariff war,

03:17China will fight till the very end.

03:20And I suspect the very end will be the winding down to zero for both-way trade between China and the United States.

03:29Meaning no more trade, no more exports from China to the United States,

03:33but at the same time no more export from the United States of goods to China.

03:38This will be a heavy blow to both China and the United States.

03:42Highly destructive.

03:44Does China want to see that? No, China does not want to see that.

03:48But if the United States continues to fight this trade war,

03:51which is the wrong war to start with, then this will be the worst-case scenario.

03:56We want to do whatever we can to avoid the worst-case scenario

03:59and achieve the best-case scenario.

04:02That is normalcy and dealing with trade as it is rather than weaponizing trade.

04:10Victor, good to see you. We'll get you back when we have some sort of outcome from these talks.

04:15Thank you very much.

04:16And thanks for staying up, by the way.

04:18Victor Gao, the Vice President of the Center for China and Globalization in Beijing.

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