BloombergBEIJING/WASHINGTON (Bloomberg) — The headline number is impressive: A quarter-trillion dollars worth of deals from China that President Donald Trump can use to show he is creating opportunities for U.S. businesses and jobs for his base.
The reality, however, is that the roughly 15 agreements unveiled on Thursday are mostly non-binding memorandums of understanding and could take years to materialize — if they do at all. A day earlier, Commerce Secretary Wilbur Ross announced $9 billion of deals, many also MOUs with few details, rather than contracts.
“To me this is an old-style visit when you pile up all the deals you can to get a big number,” said James McGregor, China chairman of the consultancy APCO Worldwide. “This was normal when the U.S. and China were just building ties, but now China is a global business power and has very damaging industrial policies and this seems naive. This is all for show for President Trump to demonstrate his deal-making prowess.”
Both Trump and Chinese President Xi Jinping hailed the deals on Thursday, calling them examples of “win-win” cooperation between the world’s biggest economies. At the same time, Xi said that China would open its market according to its own “timetable and roadmap” while calling to respect each other’s “differences” — showing that Trump will find it harder to press him for substantive policy changes.
The noncommittal nature of many of the deals reflects a lack of planning or advance work ahead of Trump’s visit to pin down significant agreements or concessions from China, according to two administration officials who asked not to be identified to speak about private deliberations.
The officials pointed to the fact that there were no agreements on giving U.S. companies more access to Chinese markets, or opening up Chinese financial markets — something investors have been demanding for years.
One of the larger deals was a joint development agreement to advance a liquefied natural gas project in Alaska, involving the state-run Alaska Gasline Development Corp., Sinopec, the China Investment Corp. and the Bank of China. The project, which Alaska has pursued for years, would involve total investment of up to $43 billion.
A top Trump official pushed back on the lack of deliverables, saying that the president has successfully built solid relationships with Xi, Japanese Prime Minister Shinzo Abe and South Korean President Moon Jae In. These will help solve bigger problems in the future, the official said, asking not to be identified.