U.S. Needs Patience With China, Top Regulatory Official Says

(Bloomberg) -- The U.S. is pushing too fast for change from China and should instead take a more patient approach, a senior Chinese regulatory official said, adding that he’s hoping for better relations under president-elect Joe Biden.

“I sense U.S. negotiators demand to get something from China quickly and hope China will change quickly,” Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said at the Bloomberg New Economy Forum. “The U.S. needs more patience.”

Biden’s election may allow both governments to reset relations, which are at their worst in decades amid soaring trade and political tensions.

“China has every intention to improve the U.S.-China relationship. China is steady, sometimes the pace of our reform is a bit slow, but is steady,” Fang said. “Looking back in four years’ time you will see huge progress in terms of reform and opening up. I sincerely hope in four years, by the end of the Biden administration, U.S.-China relations will be in a much, much better state than we are today.”

China’s economy has reached a point where it is now legitimate for the government to protect its global interests, he said.

“When your economy becomes so big and your interests are all over the world you have to protect your own interests,” the CSRC official said. “China has become so large that even if you lie down, the bullet will still hit you. Instead of lying down, you would rather stand up to defend your legitimate interest.”

Tech Ambitions

With the U.S. seeking to contain the rise of its geopolitical rival, Beijing has outlined long-term plans to become more self-sufficient, especially in the area of technology development. The U.S. has pressured allies to shun equipment from Huawei Technologies Co., barred dozens of China’s largest tech companies from buying American parts, and even slapped bans on ByteDance Ltd.’s TikTok and Tencent Holdings Ltd.’s WeChat.

Fang said China isn’t pursuing a strategy of technology self-reliance but is instead protecting itself against efforts to restrict China’s access to core technology.

“I don’t think China is driving some tech self-sufficiency, but China certainly does not want to be blackmailed by another country economically,” he said.

Appearing on the same virtual panel, Kai-Fu Lee, the chairman and chief executive officer of Sinovation Ventures, said it was a misconception to say China is copying intellectual property from rivals or that the nation’s technology ambitions can be curbed.

“If the U.S. wants to compete, there is no choice but treating China as a worthy competitor,” he said.

The New Economy Forum is organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News.

‘Hostile Rhetoric’

Charlene Barshefsky, former U.S. Trade Representative, said China’s aggressive stance was understandable given its ambitions and size, but that its actions didn’t live up to its responsibility in opening markets.

“The real problem here is the doubling down by China on an economic model that does not fit the obligations that it undertook and that results in heavily mercantilist practices,” she said on the panel. Competition between the two powers is unlikely to ease soon, she said, though China could also demonstrate good faith toward addressing U.S. concerns.

“My hope and belief is that the hostile rhetoric and the unnecessary invective will have been removed from the relationship so that its more positive aspects can come through,” she said.

Adding to the view that Biden’s election could mark a turning point, Gary Cohn, former economic adviser to President Donald Trump, said he is optimistic for a reset in relations.

“We both need each other,” he said. “The China-U.S. relationship is extremely important, and it’s vital to both.”

©2020 Bloomberg L.P.

With assistance from Bloomberg