"Despite a huge deficit in services trade with the United States, China nevertheless believed that trade in services between China and the United States is mutually beneficial," said the statement from the Chinese delegation.
Given the differences between China and the United States in the size and structure of their services industry, it remains possible for both sides to exploit their own comparative advantages and complement each other, the statement said, adding that "expanding bilateral trade in services can also promote balanced trading relations between the two sides."
In order to address trade imbalance, a top priority of the Trump administration, China has also urged the United States to remove its outdated regulations on export control and increase the exports of high-tech products to China, said Zhu, stressing that China will push for this demand in the one-year plan.
If the United States were to liberalize its export barriers against China to the same level as those applicable to Brazil or France, the U.S. trade deficit with China would narrow by up to 24 percent and 34 percent respectively, according to a research from the Carnegie Endowment for International Peace.
STEEL EXCESS CAPACITY
Talks on steel excess capacity between China and the United States are watched closely by the international community as the Trump administration is about to release a report on the national security implications of steel imports in the coming weeks.
China shared the same view with the United States that steel overcapacity is a global issue, which requires a global collective response, Zhu said, adding China also emphasizes that the excess steel capacity has been a result of sluggish global economic recovery.
Meanwhile, the Chinese delegation told the U.S. side that China has actively taken measures to cut steel overcapacity, Zhu said, citing China's plans to reduce steel capacity by 100 million to 150 million tons from 2016 to 2020.
In defense of the U.S. steel industry, the Trump administration in April invoked a decades-old, rarely used trade tool, known as a Section 232 investigation under the Trade Expansion Act of 1962, to look into all foreign steel imports.
If the investigation concludes that steel imports would undermine U.S. national security, the trade law would allow the U.S. government to impose tariffs, quotas, or other measures to restrict the imports.
"I think an honest assessment of the national security issue would conclude that there is no national security issue because we mostly produce steel ourselves or we get it from Canada and Mexico, which are close allies of the United States," said Dollar.
In his view, it won't have much effect on China if the Trump administration imposes new tariffs on imported steel, as the United States only imports "a tiny percentage of" steel from China.
As the world's two largest economies and co-chairs of the Global Forum on Steel Excess Capacity, China and the United States have maintained policy dialogue and communication regarding the steel glut, according to Zhu.
At the G20 summit in Hamburg, Germany earlier this month, G20 leaders called on the forum to fulfill their commitments on enhancing information sharing and cooperation by August, and to rapidly develop concrete policy solutions that reduce steel excess capacity, he added.
