US and Chinese officials will meet on Monday for their first formal talks since the beginning of a three-month truce in a trade war between the world’s two largest economies that has dragged down global markets.
China’s commerce ministry said on Friday that Jeffrey Gerrish, the US deputy trade representative, would meet officials in Beijing.
The talks are expected to focus on the protection of intellectual property and Chinese industrial policy, which Washington believes has put US companies at a disadvantage.
The news of the two-day meeting, which came as Beijing also announced further stimulus measures for the banking sector, gave a boost to stocks, with China’s CSI 300 up 2.4 per cent, lifting the index from a three-year low, while Hong Kong’s Hang Seng index gained 2 per cent.
Global markets have remained on edge following a December agreement to halt the imposition of new tariffs for three months, which followed the addition of duties on more than $350bn in trade goods. Those concerns were exacerbated when Apple issued its first revenue warning in 16 years on Thursday, pointing to weak Chinese sales and broader worries about the global economy.
China in recent weeks has made a number of pronouncements aimed at assuaging US concerns. Beijing put forward a new foreign investment law which it said would ban forced technology transfer, while US president Donald Trump and his Chinese counterpart Xi Jinping held a phone call which both sides described as positive.
Some analysts said Mr Gerrish’s closeness to Robert Lighthizer, the US trade representative seen as one of the most hawkish officials in the Trump administration regarding China, could portend difficult discussions.
“Lighthizer was a mentor to him, so I think they share a similar world view,” said Scott Kennedy, a China expert at the Center for Strategic and International Studies in Washington. “The negotiations are shifting to be primarily about Chinese IP protection and constraining China’s industrial policy.”
The Beijing talks are expected to lay the foundations for a possible February visit to Washington by Liu He, China’s top economic official.
“China has a strong desire to have a truce on trade war,” said Shi Yinhong, a professor of international relations at Renmin University in Beijing. He added that due to growing economic pressure on the Trump administration “the probability of the two sides reaching an agreement within the 90 days is growing”.
Tensions between the two countries over technology were highlighted by the detention in Canada last month of Meng Wanzhou, chief financial officer of Chinese telecoms group Huawei and daughter of the company’s founder, following a US extradition request.
On Thursday, the US State Department advised American citizens to exercise increased caution when travelling in China after several Canadians were detained in the country.
“It’s getting more clear that the fundamental purpose of the US is to impose a technology blockage on China, Huawei is just one case. The overall strategy of technology blockage on China will not change,” said Prof Shi.
In new stimulus measures, Chinese premier Li Keqiang on Friday visited the country’s three largest commercial banks and urged them to increase financing for small and privately-owned businesses.
Mr Li said the government would increase counter-cyclical adjustment policies to support the economy, including tax and fee cuts and cuts to banks’ required reserve ratios.
Source: Financial Times
