US, China seek deal to prevent trade war escalation

Posted February 15, 2019

Chinese President Xi Jinping plans to meet with top USA officials in Beijing this week, a report said Wednesday, as the world's two biggest economies rush to patch up their trade differences before a looming deadline.

"I've talked to the group [in China]", Kudlow told reporters.

Expectations for a trade deal have grown as China faces pressure from slowing economic growth, and swooning global markets rattle Trump and his economic advisers.

China is counting on promises of big purchases of semiconductors and other goods to ease trade tensions and convince Trump to extend the tariff truce, according to the WSJ.

Companies on both sides have been battered by Washington's tariffs and retaliatory duties imposed by the government of Chinese President Xi Jinping.

Trump's comments echoed those of U.S. Treasury Secretary Steven Mnuchin, who earlier told reporters in Beijing: "So far, so good", when asked about the progress of talks.

China now is "paying billions of dollars a month for the privilege of coming into the United States", Trump said Tuesday.

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China has offered to buy more U.S. goods but is expected to resist making deeper changes to its economy.

Chinese officials reject complaints that foreign companies are required to hand over technology.

The sticking point between the world's two largest economies illustrates a core challenge in ending their seven-month trade war: Ensuring China's pledges will translate into concrete action.

Chinese state news agency Xinhua reported on Thursday that China's Vice Premier Liu He met US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin.

Curbing China's state subsidies is a priority in the trade talks for U.S. Trade Representative Robert Lighthizer, who has warned that America will have a sharply diminished economic future if China is allowed to continue its industrial policies and supplant U.S. dominance in high-technology industries.

Chinese officials also are balking at US pressure to accept an enforcement mechanism to monitor whether Beijing carries out its promises.

"They feel that it is humiliating for China if another country does this", he said.

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Mr Trump has indicated he is flexible to the March 1 deadline, suggesting he would let the date "slide for a little while" if a deal was in sight but would prefer not to do so. Deputy-level officials started talks on Monday.

Beijing has tried to deflect pressure by emphasizing China's growth as an export market.

The pair settled near the lower end of its daily trading range, albeit managed to find decent support on Thursday amid US-China trade optimism and better than expected Chinese trade balance figures.

"When the time is right, the hope would be that the personal chemistry that exists (between Trump and Xi) will pay dividends", said Erin Ennis, senior vice president at the U.S.

The two USA cabinet officials will meet with Xi on Friday, the South China Morning Post reported, citing a source briefed on the arrangements.

The president said he expects to meet with Chinese President Xi Jinping to close the deal at some point.

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