China has a long history of making trade-offs, in which countries have different standards of living or benefits from the goods they export.
But with trade relations between China and the US on a high-water mark, there is now increasing pressure on Beijing to be less accommodating, and for the two countries to work more closely.
In a speech in Beijing on Tuesday, President Donald Trump pledged to move to a “new era of prosperity and security” and to increase trade with the world’s second-largest economy.
But in a speech to a US chamber of commerce in April, he called China’s “anti-access and control measures” a “massive barrier” that made the US-China relationship “unfair”.
“We need to make sure that we do not get stuck in this old pattern of trade,” Mr Trump said.
“That means that if China is not willing to be a fair and open trade partner, we will have to negotiate differently.
If China is going to make some kind of a deal with the US that will make our lives easier, it will have got to be fair, it has got to have fairness.”
The trade issue is one of the many thorny issues facing the Trump administration, as the White House struggles to navigate a trade-focused agenda that has seen some of its most senior executives leave, including chief strategist Steve Bannon.
China has threatened to impose punitive tariffs on US products, which could hurt US exporters.
Last week, Mr Trump announced he had put off plans to discuss the trade issue with Chinese President Xi Jinping until later in the year, when he could take a closer look at it.
The administration has been working with a group of leading economists to come up with a comprehensive strategy for addressing the trade deficit, which has grown to $US1.2 trillion ($2.2tn) in recent years.
A new report released on Monday by the Congressional Research Service said China was now the biggest foreign creditor to the US.
Mr Trump said in the speech that China had become the biggest economic and financial creditor to America.
“This means that our country has lost millions of jobs and trillions of dollars in trade,” he said.
Read more: China-US trade deficit reaches $US2.5 trillion, US trade deficit with China reaches $1.6tn, China’s trade surplus with the United States reaches $7.5tn.””
We will never give up on our allies in the Asia-Pacific, but we are not going to be bullied.
Read more: China-US trade deficit reaches $US2.5 trillion, US trade deficit with China reaches $1.6tn, China’s trade surplus with the United States reaches $7.5tn.”
Our relationship is stronger than ever before.
Our nations have a deep and abiding friendship.
“The US president also reiterated his pledge to move away from the North American Free Trade Agreement (NAFTA), which was negotiated by his predecessor, former President Barack Obama.
President Donald Trump delivers remarks during the first session of the ASEAN-China Strategic and Economic Dialogue at the Shangri-La Hotel in Beijing, China, September 12, 2019.
On Monday, he said that he would withdraw the US from the trade agreement, which he labelled a “disaster” that would have had “very negative consequences” for US-Chinese relations.
He said he was not opposed to a free trade agreement with China, but the agreement was “not fair to America”.”
The agreement is not fair to China, and I will be looking to renegotiate,” Mr Donald Trump said at the time.”
The fact that we’re not doing that, it’s a very, very bad deal for the American people.
It’s a terrible deal for American workers.
It’s a bad deal, and it will never be fair.
“Mr Trump was elected to office in part because of his strong support for free trade.
Under his leadership, the US trade surplus has increased to more than $US10tn, the highest since World War II, and China’s has grown by more than 15 per cent, with its economy becoming more globalised.
As a result, China has become the world leader in the manufacturing and agricultural sectors.
Trade experts say that if the US were to exit the TPP, which Mr Trump has promised to renegotiating, there would be severe economic fallout for the US economy.”
[But] if China does not change its stance, there will be enormous economic consequences.”