United States says China has pledged to buy U.S. as tough issues remain

Daniel Fowler
January 12, 2019

"Even if a deal is cobbled together, the more strident trade hawks in the White House and Trump may not sign off", Mizuho Bank's Vishnu Varathan said.

Washington has presented Beijing with a long list of demands that would rewrite the terms of trade between the world's two largest economies.

The results of the talks would be analysed at a separate meeting between United States trade representative Robert Lighthizer and Chinese Vice-Premier Liu He.

"I don't think the US will easily remove tariffs that have been imposed on Chinese goods".

Trump, a Republican, has accused China of cheating the United States on trade and stealing USA intellectual property, though he often has said he has a good personal rapport with Xi.

ANALYST'S TAKE: "The potential of movement on China-U.S. trade means a moderation of extreme bearishness around the outlook for global growth", Michael McCarthy, chief market strategist at CMC Markets in Sydney, said in an interview.

"With regard to trade issues and structural problems both sides were concerned about, both carried out extensive, deep, and meticulous exchanges, promoted mutual understanding, and laid the foundation for solving problems that both are interested in", the statement read.

The timing of Monday's foray by the U.S. naval ship coincided with the commencement of trade talks between the two countries.

Both parties agreed to continue to maintain close contact, the ministry said in a brief statement on its website.

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The Chinese side was led by Commerce Vice Minister Wang Shouwen.

The USTR statement emphasised American insistence on "structural changes" in Chinese technology policy, market access, protection of foreign patents and copyrights and cyber theft of trade secrets. Chinese pledges to increase USA imports would naturally center on a boost in agricultural products sent to China.

Trump has complained repeatedly about the USA trade deficit with China, which previous year likely exceeded the 2017 gap of $336 billion. "The view, once commonly heard in Beijing, that it could outlast America in a grinding tariff battle has given way to the realisation that, as the country with the huge trade surplus, China has more to lose upfront".

China also proposed clear bans on forced technology transfer in new draft foreign investment legislation.

Last year, the USA imposed tariff hikes of up to 25 per cent on United States dollars 250 billion of Chinese goods.

"I think there's a very good chance that we will get a reasonable settlement that China can live with, that we can live with and that addresses all of the key issues", Mr Ross said in an interview with CNBC.

Russia is reportedly ranked as China's tenth biggest trade partner, while China remains a major importer of Russian produce, accounting for 15 percent of the country's global trade as of 2017.

"China's position in the China-US trade friction and its solutions to the friction is open, it's transparent", Lu said at a regular press briefing.

"The earlier escalation of the trade conflict between the USA and China and souring bilateral relations appear to have given way to a more conciliatory approach since early December", he wrote in a note Thursday.

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