As the U.S.-China relationship has grown increasingly rocky over the course of the COVID-19 pandemic, many analysts pointed to trade as a high point in bilateral ties, in a reversal from last year. Now signs are beginning to emerge that trade conflicts will once again become a bigger point of contention in the relationship. China’s economy, which is experiencing a “V-shaped” and slow recovery from the impact of COVID-19, is not on track
to meet its Phase 1 trade deal promises, and high-level meetings discussing the fulfillment of the deal expected to take place this week were cancelled
. It was not clear why the two sides failed to meet on August 15, and although the talks are planned to continue, there has been no new reported date. A delay gives Chinese officials more time to buy U.S. goods and show that they are trying to live up to the deal’s ambitious purchase targets.
In related economic news, new data from the U.S. Treasury Department shows that China cut its U.S. debt holdings for the third time this year, down to a total of $1.07 trillion. China was overtaken by Japan as the U.S.’s largest foreign debtor last year and now holds the second-largest amount of U.S. debt. In June, China sold $9.3 billion dollars’ worth of its U.S. Treasury assets.