As we reported last week, U.S. Trade Representative Katherine Tai’s recent speech on U.S. trade policy towards China did not reveal many details about the administration’s plans. The absence of new information has contributed to a mixed reaction from Chinese officials, scholars and media.

At an October 8 press conference, the spokesperson for China’s Ministry of Foreign Affairs provided only very general thoughts on these issues:

In principle, I'd like to stress that China-US economic and trade relations are essentially mutually-beneficial. There is no winner in a trade war. Issues in bilateral economic and trade relations should be properly dealt with in the spirit of mutual respect and equal-footed consultation. We hope the US will work together with China for the sound and steady development of the bilateral economic and trade ties.

The formation and development of global industrial and supply chains is the result of both market law and choices of the business community. Artificial industrial "transfer" and "decoupling" runs counter to the law of the economy and objective reality. It cannot solve domestic problems and will only seriously undermine the stability and security of global industrial and supply chains. Cooperation and dialogue instead of decoupling or confrontation is the strong aspiration of various sectors in both China and the US, including the business community. The US should heed these calls and do more things conducive to the sound and steady development of China-US economic and trade ties.

The state-run Global Times published a commentary in which it noted that Tai presented "a tough attitude towards China,” and responded with the following :

Based on the principle of equality and mutual benefit in trade, many specific issues of trade between China and the US can be adjusted. China has made corresponding efforts in terms of intellectual property, investment, and the US' demand for trade balance. However, if the US intends to shake China's foundations, prevent China from formulating plans to develop its technological innovation capacity, and change China's national policies conductive to promoting competitiveness, China will never permit it.

China welcomes dialogue and negotiations, and is willing to make efforts to jointly build an equal and mutually beneficial China-US trade system. But we will adhere to the consistent manner of not making concessions on principle, based on doing our own thing, and not being afraid of any contest, including a protracted one. The China-US trade war has lasted for more than three and a half years. Instead of being weakened, China's economy has taken a step forward in comparison with the scale of the US. The Chinese people are more confident and their stamina continues to increase. We are clearly aware that all this is the basis for the US to consider using non-trade war coercive methods to discuss issues with China.

A Xinhua opinion piece (link in Chinese) also emphasized the importance of U.S.-China cooperation:

Both nations as well as the whole world will benefit from China-US cooperation, and both countries and the world will suffer from China-US confrontation. It is hoped that the United States will change its course, respect the principles of market economy and international trade rules, and meet China halfway, so as to promote the healthy and stable development of China-US economic and trade relations, and further benefit the people of the two countries and around the world.

Some Chinese scholars reacted somewhat positively to Tai’s statements. "Unlike his predecessor Donald Trump's aggressiveness, the Biden administration aims to maintain negotiations while mounting trade restrictions. In a way, it accords with the stance of China, which seeks to solve disputes through dialogue," Huo Jianguo, former president of the research institute of the Ministry of Commerce, told the Global Times. But it is unlikely that China-US trade relations will go back to the pre-trade war period, Huo warned. "The US should drop its confrontational mentality toward China and facilitate competitive cooperation via dialogue and negotiations," Huo added.

During a CSIS event, Tu Xinquan, Dean of the China Institute for WTO Studies at the University of International Business and Economics, also expressed positive views on the Biden administration’s statement. “I think, generally speaking, my impression is, it’s positive, her remarks and statements, especially if she does not support decoupling. I think it's a very great concern for China. And she used the word like durable coexistence, and recouple. These words, kind of new, but basically I think they are positive for the US-China trade relationship.”

But Tu disagreed that industrial policy is a unique problem of China, as he pointed out that “the role of the state has become more and more important in many economies, not only in China and even in the United States, and ... Ambassador Tai also mentioned that the US will increase its investments in a lot of infrastructure or education or people lives.”

Industrial policy may be one of the thorny issues for the United States and China. During a virtual meeting between Tai and her Chinese counterpart Liu He on October 8, the first high-level trade meeting after Tai's speech, Liu restated China's position on industrial policy and China's economic model, in addition to calling for tariff removal, according to the readout issued by the Ministry of Commerce.

In resolving the differences between the two nations, Tu noted that “bilateral conversations and dialogues are important” but "international rules are even more important, because the two [powerful economies] have the capability to hurt each other.” Hence, "if we can have the same set of rules, we follow the same set of rules, then it would be easier to deal with conflicts between each other," Tu added.

Wang Yong, Director of the Center for International Political Economy at Peking University, during the same event, also praised Ambassador Tai for “recognize[ing] the value of the US-China commercial relations,” and that “she's very right in trying to come back to the dialogue with the Chinese counterparts to settle the differences of interests and positions.” When commenting on China’s enforcement under the Phase One Agreement -- in particular, the purchase commitments -- Wang said that “it's very important to recognize ... all these factors, including the impact of pandemic and rising cost of cargo ... unfortunately, influence the implementations of the Phase One agreement.” Wang also called for both sides to “de-politicize or de-securitize the trade,” which is “very important.”

But some Chinese scholars were more cautious towards the view that this is a turning point in U.S.-China relations.  Zhao Dingxin, professor at the Department of Sociology at the University of Chicago and Zhejiang University, stated in a recent article (link in Chinese) that “China, as the world's second-largest economy that has a vast territory, huge population, military strength, and a cultural and political system that is very different from the United States and the West, will inevitably bear the brunt of the United States' destructive spillover effects” and the key to China's handling of China-US relations is to avoid falling into the "scapegoat trap" which means China becoming the scapegoat for U.S. domestic problems.