China, US Strike Upbeat Tone After Talks But Offer Few Details (FT)
Last Modified: 08:05 PM, Wed Jan 09, 2019

Lucy Hornby in Beijing and Alice Woodhouse in Hong Kong 10 January 2019

Washington pushes for goods purchases but resolving industrial policies remain tricky

China and the US ended three days of trade talks this week with Beijing striking an upbeat note while Washington focused on the need for enforcement of any deal but with both sides providing few concrete signs of progress.

The Chinese ministry of commerce said in a statement on Thursday the two countries had held “extensive, deep and meticulous discussions” that had “promoted mutual understanding”.

The Office of the United States Trade Representative summed up the week’s talks saying that officials had discussed China’s pledge to buy a “substantial amount” of agricultural, manufacturing, energy and other products from the US.

Asian stocks, which had been rising on optimism after the talks were extended for an unscheduled third day on Wednesday, were little changed on Thursday.

The Hang Seng index, which posted its best day in more than a month on Wednesday, was up 0.25 per cent in midday trading on Thursday. In mainland China the CSI 300 was 0.37 per cent higher.

Growing concerns about a global economic slowdown, as well as financial market volatility, have put  pressure on both Washington and Beijing to end the tit-for-tat tariff escalation built up over the past year.

US president Donald Trump and US trade representative  Robert Lighthizer are expected to meet Chinese vice-president Wang Qishan in Davos, Switzerland, later this month and could advance a more detailed accord there.

Both sides are working against a March 2 deadline, when higher US tariffs kick in on $200bn worth of Chinese goods.

Washington’s complaints that China is stealing intellectual property from American companies and forcing them to hand over trade secrets and sensitive technologies in order to spur its own innovation remain trickier to resolve.

As the talks have become more detailed, the US is also keen to secure ironclad mechanisms to ensure that Beijing will stick to the commitments it makes. “Officials discussed the need for any agreement to provide for complete implementation subject to ongoing verification and effective enforcement,” USTR said.

Stephen Innes, head of Asia-Pacific trading for forex broker Oanda, said the discussions remained a work in progress.

“This outcome is very much in line with broader expectations given this was a preliminary mid-level US and Chinese trade representatives affair, possibly setting up for a more significant announcement in Davos when President Trump takes the grand stage.”

Washington continued to apply pressure. Trade negotiators from Japan, Europe and the US agreed in Washington to co-operate on reining in industrial subsidies. They also pledged to use export controls to block efforts by unnamed “third countries” to force technology transfers.

“The ministers advanced discussions on their shared objective to address non-market-oriented policies and practices of third countries,” they said, in a statement clearly aimed at China.

In what analysts said was a sign that negotiations are playing out on many fronts, Chinese president Xi Jinping expressed support for a second US-North Korea summit to dismantle the country’s nuclear capability and remove sanctions, following a meeting with North Korean leader Kim Jong Un that ran parallel to the trade talks.

Follow Lucy Hornby on Twitter @HornbyLucy

Follow Alice Woodhouse on Twitter @alicemuwu

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Organization: Oanda, Twitter Inc, U.S. Trade Representative
Location: Asia, Europe, China, Japan, Asia-Pacific, US
People: Robert Lighthizer, Xi Jinping, Wang Qishan, Donald Trump, Lucy Hornby, Alice Woodhouse
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Chinese politics & policy, US politics & policy, Emerging markets, US-China trade dispute, US trade, Politics, World, Markets, Global trade, Economy, US economy, Asia-Pacific economy, US-China trade dispute, Trade disputes, Global Economy, Chinese economy, Chinese trade