Experts: US trade deficit with China can be reduced by expanding cooperation in infrastructure and energy

Experts believe that the US-China trade deficit can be reduced by expanding infrastructure and boosting large transactions of coal power, electricity and gas. Heads of enterprises believe this is due to the two countries both having widespread needs in these sectors.

The Chinese infrastructure sector is now more open to the world than ever, thanks to the Belt and Road Initiative. At the same time, the US government has released plans to allocate one trillion US dollars to fund the infrastructure sector. This could signify a broader prospect of cooperation, experts said at Harvard China Forum, the annual conference in Boston that focuses on China-US relationship.

“In information construction for infrastructure, China has caught up with the world and even passed the US in some sectors,” said Tan Xu, president of China Telecom Americas.

Tan believes that China Telecom and mainstream US operators are partners rather than competitors. He disclosed that US technology companies are working with China Telecom on a number of new projects. Initiatives such as the New Cross Pacific, which is about to begin, and Hong Kong America, a sea cable project linking China and the US, show a partnership between the two nations.

Furthermore, the US should seize the opportunity brought by China’s energy transformation. They should see China as an opportunity for partnership instead of a rival, according to professor Qingyun Sun with US West Virginia University.

As China’s national policy to replace coal with natural gas is pushed forward, a shortage of gas in the country means a market for the US.

Li Shaolin, president of PetroChina International (America) Inc, says that after technology reform the price of a barrel of US natural gas is $42. However, the same barrel of gas is sold in China for $57, meaning the US has the price advantage between the two.

Li suggests that the US strengthen energy cooperation with China. By increasing bulky transactions in the sector, the US can help deduce a trade deficit with China. In 2017, China imported 420 million tons of crude oil, replacing the US as the world’s largest crude oil importer for the first time.

Li also disclosed that China’s ethylene imports from the US will reach 10 million tons worth $40 billion. He expects that the US exports to China will reach around $120 billion, more than the US’s goal to reduce $100 billion China-US trade deficit.