SINGAPORE (Oct 8): US and Chinese officials are resuming their trade talks, and an old China hand is optimistic that some kind of resolution can be reached later this year.
“I believe both sides want to reach an agreement,” said Andy Rothman, investment strategist at fund manager Matthews Asia, in an interview on Oct 8.
“In the past, they've been struggling with how to get there, but I think they are learning their way around,” he added.
Liu He, China’s vice premier, is now in Washington.
Rothman, a former US diplomat who has more than three decades of experience working in China, believes that US president Donald Trump is now more motivated to reach some form of resolution.
“A deal with China which would allow him to drop his tariffs, which would allow the Chinese to drop their tariffs, is better for his re-election prospects than no deal,” said Rothman.
If some form of progress can be reached out of the current round of talks, the stage will be set for Trump and China’s president Xi Jinping to bring the talks further in November.
That’s when the APEC Summit will be held in Chile.
However, Rothman acknowledges that DC politics can be “very unpredictable”. When Trump and Xi met in Osaka in June, there was optimism that progress can be made. However, things turned back for the worse not too long after.
“There are no guarantees but I think the odds are that something like that will happen, because the president believes that it is in his best interest – that’s what I hear him saying to his staff,” said Rothman.
On the other hand, based on his conversations with the Chinese side, they are also eager to do a deal “as long as it is reasonable”, said Rothman.
“It is far from a guarantee, but I think that's my base case, that there’s going to be a modest trade agreement, which will hopefully allow the tariff dispute to go away,” he added.
