Wednesday, 21 August, 2019

China says talks with U.S. on trade battle have resumed

A staff member watches over a truck at a port in Qingdao in east China's Shandong province China needs to make policy changes to avoid cold-war situation: Pence
Deanna Wagner | 16 November, 2018, 02:39

Last week, US Secretary of State Mike Pompeo emphasized that despite the fact that the US is still "concerned" over China's military policies and religious freedom in the country, Washington does not seek a new "cold war" with Beijing.

China agreed to buy more American energy and agricultural goods to narrow the trade deficit in May, but the deal was blocked by Trump, leading to the escalation of the trade war. A top Chinese negotiator, Liu He, will probably visit Washington shortly to advance "some informal talks", Commerce Secretary Wilbur Ross said at a conference.

Trump was scheduled to meet with members of his trade team on Tuesday to discuss a separate issue: auto tariffs. However, the sources gave no details and it was not clear if the response contained concessions that would satisfy President Trump. Trump has made it a priority to take an aggressive stance against China for what he says are unfair trade practices, including intellectual property theft and forced technology transfers. While Trump argues against China's state-led development, China sees its tech-related investments and business as being treated unfairly by the US, analysts said. It did not contain the sort of commitment to change industrial policies such as Xi's "Made in China 2025" that Washington has been seeking, according to one person familiar with the discussions.

Chinese Commerce Ministry spokesman Gao Feng, asked on Thursday about the Chinese response, said that "high-level" contact had resumed since Trump and Xi spoke by phone.

On January 1, Washington's 10 percent tariff rate on $200 billion in Chinese goods is set to rise to 25 percent.

During an interview with The Washinton Post, Pence said that President Donald Trump is open to finalize a trade deal with Chinese President Xi Jinping in Argentina later this month, only if Beijing is ready to bring in changes to it's economic, political and military activities as demanded by the US.

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Analysts and officials said they expected that a face-to-face meeting between Xi and Trump could bring a breakthrough in the trade impasse.

"The most probable scenario will see that China and the USA reach some kind of preliminary framework of agreement, where the two sides can drop tariff measures and start to work things out in a more regular, productive way", GRisk's Feng said.

In this context, Pence singled out "rampant intellectual property theft, forced technology transfer, restricted access to Chinese markets, respect for global rules and norms, efforts to limit freedom of navigation in worldwide waters and Chinese Communist Party interference in the politics of Western countries".

China's Foreign Ministry didn't respond to a faxed request for comment on the call between Mnuchin and Liu. "The US side should also respect China's sovereignty, security, and development interests, and respect the development path chosen by the Chinese people in line with its own national conditions".

Chinese exports to the United States have held up despite the tariffs, rising more than 13 per cent over a year earlier each month since the first increases in July.