(Bloomberg). The U.S. is still very far behind China on trade and economic questions. Recent statements by both countries show just how large that gap continues to be.

China’s ambassador to Washington said over the weekend that Beijing wants the U.S. to stop restrictions and sanctions against its companies, outlining some of the Asian nation’s demands for future talks. That was in response to U.S. Trade Representative Katherine Tai’s comments before her call with Vice Premier Liu He, in which the U.S. raised concerns about China’s state-led support for businesses. 

Beijing wants the U.S. to rectify problems such as the increasing difficulty Chinese companies have investing or listing in the U.S. and the restrictions placed on more than 900 Chinese entities, Ambassador Qin Gang told Phoenix TV in an interview, according to a summary on the embassy’s website. In particular, restrictions due to “national security” are unfair, Qin said, warning of serious consequences if this continued.   

The U.S. continues to tighten its restrictions on Chinese companies, including recent suspensions of initial public offerings for Chinese-based businesses and demands that existing U.S. listed companies submit to greater scrutiny.

Trade Deal

The two sides disagree on the validity of China’s trade agreement last year. It required Beijing to change its regulations in intellectual property, among other areas. The agreement also included specific goals for Chinese purchase of U.S. products. According to Bloomberg, China only has purchased half the products it had promised. 

Qin rejected accusations that China has failed to adhere to the agreement, arguing that the country has made “tangible” steps and “sincerely and steadily” implemented the accord.  

However, U.S. Commerce Secretary Gina Raimondo said last month China isn’t abiding by commitments to buy goods, noting that Beijing is preventing the nation’s airlines from buying “tens of billions of dollars” of Boeing (NYSE:) Co. planes. U.S. Trade Representative Katherine Tai said last week the administration would work to enforce China’s commitments in the trade deal.  

Industrial Policy

The U.S. has long-standing concerns about the state-controlled structure of China’s economy and subsidies, and has repeatedly raised what a senior U.S. official last week called China’s “unfair, non-market practices.” Those issues were part of the negotiations under the Trump administration, although they weren’t included in the 2020 trade deal.

According to Bloomberg, the U.S. continues to attempt to talk with China on this issue and also is considering an investigation into Chinese subsidy to exert pressure on Beijing. Bloomberg was informed by people who were familiar with the matter last month.   

Continue reading: U.S.-China trade booms like a virus, tariffs never happened

In her call with China’s vice premier last week, Tai “emphasized U.S. concerns relating to China’s state-led, non-market policies and practices that harm American workers, farmers and businesses,” according to the U.S. readout of the conversation.

However, there’s no sign that China is willing to make changes. The topic wasn’t in China’s official statement on the Tai-Liu discussion, which instead said that Liu made clear Beijing’s position “on issues including China’s economic development model and industry policies,” and requested the U.S. get rid of all the tariffs and sanctions.

Read more: U.S. Trade Representative Tai, China’s Liu Discuss Trade

The U.S., in turn, didn’t mention discussing dropping tariffs in its statement. While the U.S. announced it would start a new process to exclude some imports from being suhected to duties, there’s no indication that it plans to permanently lift any of the other taxes on Chinese goods. A Chinese investigation could result in additional tariffs. 

Last month, Presidents Xi Jinping & Joe Biden called each other by telephone. There are reports that they will hold a virtual meeting within the next few months. However, both sides remain focused on improving their relations. 

For the U.S., China should change the “practices that do harm to American firms and workers,” according to a senior government official. For China, the U.S. should “do more things conducive to the sound and steady development of China-U.S. economic and trade ties,” Ministry of Foreign Affairs Spokesman Zhao Lijian said last week.

There’s no public sign of those parallel tracks merging anytime soon. 

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