US, China hold crucial talks to ease bitter trade war

Andrew Cummings
January 7, 2019

The statement comes as trade talks between China and the United States are underway in Beijing, the first round of face-to-face discussions since both sides agreed to a 90-day truce in a trade war that has roiled worldwide markets.

President Donald Trump claims his administration is "doing very well in negotiations with China", but the United States team heading to Beijing this week is starting nearly from scratch.

Ministry spokesman Lu Kang said Monday during a routine briefing that Chinese military aircraft and naval vessels were dispatched to identify the US vessel and warn it to leave the area near disputed islands in the South China Sea.

Asked about the timing of the operation during trade talks, Lu said resolving issues would benefit the two countries and the world.

The two-day talks, due to start on Monday, come after Chinese President Xi Jinping and his U.S. counterpart, Donald Trump, in December agreed to a truce in their escalating spat which has seen the two sides raise import tariffs on each other's goods.

Ahead of the talks, China softened its stand by offering a mix of concessions by resuming purchases of United States soybeans, suspended punitive tariffs on imports of U.S. cars and toned down its Made in China 2025 hi-tech policy.

US Deputy Trade Representative Jeffrey Gerrish is to lead the delegation that is to meet with Chinese counterparts starting today.

The talks come a month after Trump and Xi agreed to suspend a planned tariff hike for three months to give negotiators space to reach an agreement and end a dispute that has roiled world markets. The seeking concessions in Chinese business practices; in exchange it will eliminate tariffs recently imposed on Chinese goods.

An editorial in the nationalist state-owned tabloid the Global Times on Monday said China would not back down and cave to USA demands. The two sides have provided scant information about the discussions.

Beijing is prepared to buy more American products, Schmitz told NPR's Steve Inskeep.

China has sounded a positive note ahead of trade talks with Washington, but economists warn they face lengthy wrangling over technology and the future of their economic relationship.

The White House said in December the two sides would negotiate "structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft". "I think the two sides need some kind of agreement for now", Tu said.

The talks are crucial as the US stock market continues to be volatile. American officials worry those might erode US industrial leadership.

"If China was going to raise the white flag, it would have done it already", the paper said.

American companies like Apple and FedEx have already attributed lowered revenue estimates to the trade war with China.

China's stridently nationalist Global Times tabloid said in an editorial late on Sunday that statements from both sides that they hoped to reach a deal were cause for optimism, but that Beijing would not cave in to USA demands.

Chinese growth fell to a post-global crisis low of 6.5 percent in the quarter ending in September.

The meeting comes amid rising concern about the impact of trade tensions on the global economy.

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