China and the US are likely to start next stage trade negotiations in the second half of this year, aiming to reach a new deal to follow on from the phase one trade agreement which is set to expire by year-end, policy advisors told MNI following the latest call between top trade negotiators of the two countries.

Other than tackling climate change together, economic and trade cooperation are still key to preventing China-US relations from deteriorating, said Yu Miaojie, a member of the Economic and Trade Policy Advisory Committee of the Ministry of Commerce.

Mei Xinyu, a senior researcher at the Chinese Academy of International Trade and Economic cooperation affiliated with MOFCOM, believes China has leverage, being the only reliable manufacturing hub not impacted by Covid-19 at least by year-end, and the US still needs Chinese products to help soak up some the large fiscal stimulus seen through the pandemic recovery.

Meanwhile, both Yu and Mei think China will focus on self-innovation to become self-reliant in semi-conductors, with little chance of Sino-US cooperation in this area, despite Washington and South Korea working closer to move capacity to the US soil.

Washington will remain hawkish towards Chinese high-tech companies and won’t relinquish the current sanctions framework, said an advisor requiring anonymity, adding that whether the two can cooperate on global chip shortage will largely depend on how urgent US businesses feel the issue is, the person said.

From: MNI  2021-05-27