USA and China wrap up trade talks in Beijing. What happens next?

Daniel Fowler
January 10, 2019

"Neither side has made a briefing, because the US delegation is on the plane now", wrote Hu Xijin, editor of the Global Times, published by the ruling Communist Party's official People's Daily. Washington "cannot push China too far" and must avoid a situation that "spins out of control".

The U.S. trade delegation in Beijing is "wrapping up" meetings with Chinese officials and will return to the United States after a 'good few days, ' a U.S. official said.

The second day of trade negotiations coincided with an unannounced visit by North Korean leader Kim Jong Un for talks with Xi in Beijing, amid speculation of a second meeting between Kim and Trump. Asian bourses saw a strong finish with Japan's Nikkei and China's blue-chip CSI 300 closing up 1 per cent while the tech-heavy South Korean KOSPI jumped almost 2 per cent. -Chinese relations for years.

However, headwinds remain, chief among them the development of trade talks between Washington and Beijing. Europe, Japan and other trading partners echo USA complaints those violate Beijing's market-opening obligations.

Chinese officials have suggested Beijing might alter its industrial plans, but they reject pressure to abandon a strategy seen by communist leaders as a path to prosperity and greater global influence.

Increased purchases by China of USA soybeans, oil, liquefied natural gas and financial services are viewed as easier to achieve than major changes to China's industrial policies aimed at transferring U.S. technology to Chinese firms. Over the past two days, talks have been under way between the United States and China to find a way to end the conflict. Trump tweeted on Tuesday. USA and North Korean officials are believed to have met in Vietnam to discuss a location.

Speaking at a daily news briefing in Beijing, Chinese foreign ministry spokesman Lu Kang confirmed both sides had agreed to extend the talks beyond Monday and Tuesday as originally scheduled.

China's position on trade is "transparent and the US side is well aware of it", said Lu Kang.

The US released a statement on the meetings, alluding to at least one potential concrete commitment on the part of China.

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Oil also caught investors' attention after U.S. crude and Brent jumped overnight, helped by optimism over easing Sino-U.S. trade tensions, while OPEC-led crude output cuts also provided support.

The US delegation, led by Deputy Trade Representative Jeffrey Gerrish, included representatives from the departments of energy, agriculture, treasury and commerce, while the Chinese side was led by Commerce Vice Minister Wang Shouwen.

If no deal is reached by March 2, Trump has said he will proceed with raising tariffs to 25 per cent from 10 per cent on $200 billion worth of Chinese imports, at a time when China's economy is slowing significantly.

"Talks with China are going very well!".

A statement released by China's Commerce Ministry on Thursday morning said both sides carried out "wide, deep and thorough exchanges" on trade and structural issues of mutual concern.

Cooling economic growth in both countries is increasing pressure to reach a settlement.

The talks are occurring as Chinese growth - 6.5 percent in the July-to-September period - fell to its lowest point in a decade. Auto sales tumbled 16 per cent in November over a year earlier. They could even continue for a third.

For its part, Beijing is unhappy with US export and investment curbs, suggesting it might demand concessions.

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