China Economy

China and the US can ease trade differences in 90 days, former central bank governor says

Key Points
  • Zhou Xiaochuan said the U.S. and China could make good strides on trade differences within 90 days.
  • The US has hit $250 billion of Chinese goods with tariffs since July.
  • The former PBOC governor has previously told CNBC that Trump's trade tariffs won't cripple China's growing economy.
Former PBOC governor on tech, bitcoin and the US-China relationship
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Former PBOC governor on tech, bitcoin and the US-China relationship

Washington and Beijing can make progress on their trade differences within three months, the former People's Bank of China (PBOC) governor Zhou Xiaochuan told CNBC on Wednesday.

"I see there is a pretty high possibility to reach some sort of success during the 90-day negotiation window," Zhou told CNBC's Geoff Cutmore at The Boao Forum and Ambrosetti Meeting in Rome, Italy.

The U.S. has hit $250 billion of Chinese goods with tariffs since July, while China has retaliated by imposing duties of its own on $110 billion of American products.

At a post-G-20 summit meeting in Argentina last weekend, President Donald Trump agreed not to boost tariffs on Chinese goods from 10 to 25 percent on January 1. In exchange, the White House claimed that China would buy a "very substantial" amount of agricultural, industrial and energy products.

Markets have gyrated over the value of that meeting, but Trump said Wednesday that he believed that Chinese President Xi Jinping would fulfil his pledges.

https://twitter.com/realDonaldTrump/status/1070306739092889601

One of the main issues raised by the U.S. is a perceived unfair transfer of American technology and intellectual property to China. Zhou said that for China it had also become "very important to protect intellectual property rights."

Zhou added that Beijing had already ended technology transfer as a policy, but conceded there could still be cause for U.S. complaint at a local government and business-to-business level.

"But those sorts of things are, relatively, not so difficult for China to improve on and strengthen the existing laws," he said.

The former PBOC governor also said that Beijing could help to crack down on "bad guys" who were using the internet to export high-strength opioids such as Fentanyl to the United States.

On fears that another 90 days of uncertainty could impact capital flow into China, Zhou said that while foreign direct investment into the country was a welcome addition, the domestic economy was a far bigger driver.