China con­fi­dent on US trade pact; Trump cites Xi’s ‘strong sig­nals’

Gulf Times Business - - BUSINESS -

China ex­pressed con­fi­dence yes­ter­day that it can reach a trade deal with the United States, a sen­ti­ment echoed by US Pres­i­dent Don­ald Trump a day af­ter he warned of more tar­iffs if the two sides could not re­solve their dif­fer­ences.

The re­marks, by the Chi­nese Com­merce Min­istry, fol­low a pe­riod of rel­a­tive quiet from Bei­jing af­ter Trump and Chi­nese leader Xi Jin­ping reached a tem­po­rary truce in their trade war at a meet­ing over din­ner in Ar­gentina on Satur­day.

In a brief state­ment, the min­istry said China would try to work quickly to im­ple­ment spe­cific items al­ready agreed upon, as both sides “ac­tively pro­mote the work of ne­go­ti­a­tions within 90 days in ac­cor­dance with a clear timetable and road map”. “We are con­fi­dent in im­ple­men­ta­tion,” it said, call­ing the lat­est bi­lat­eral talks “very suc­cess­ful”.

Trump, in a post on Twit­ter, linked Bei­jing’s si­lence to of­fi­cials’ trav­els and said he thought Xi had been sin­cere dur­ing their week­end meet­ing to ham­mer out progress over trade.

“Very strong sig­nals be­ing sent by China once they re­turned home from their long trip, in­clud­ing stops, from Ar­gentina.

Not to sound naive or any­thing, but I be­lieve Pres­i­dent Xi meant ev­ery word of what he said at our long and hope­fully his­toric meet­ing.

ALL sub­jects dis­cussed!” Trump wrote yes­ter­day.

The US pres­i­dent a day ear­lier had said the cease­fire could be ex­tended but warned tar­iffs would be back on the ta­ble if the talks failed and that he would only ac­cept a “real deal” with China. China’s For­eign Min­istry re­ferred spe­cific ques­tions to the Com­merce Min­istry, which is due to hold its weekly news brief­ing to­day in Bei­jing.

“We hope the two work­ing teams from both sides can, based on the con­sen­sus reached be­tween the two coun­tries’ lead­ers, strengthen con­sul­ta­tions, and reach a mu­tu­ally ben­e­fi­cial agree­ment soon,” For­eign Min­istry spokesman Geng Shuang told re­porters. The threat of fur­ther es­ca­la­tion in the trade war be­tween the world’s two largest economies has loomed large over fi­nan­cial mar­kets and the global econ­omy for much of the year, and in­vestors ini­tially greeted the cease­fire with re­lief.

The mood has quickly soured, how­ever, on scep­ti­cism that the two sides can reach a sub­stan­tive deal on a host of highly di­vi­sive is­sues within the 90day ne­go­ti­at­ing pe­riod, and mar­kets con­tin­ued to slide on Wed­nes­day in part from con­fu­sion over the cease- fire’s lack of de­tail. Fail­ure would raise the spec­tre of a ma­jor es­ca­la­tion in the trade bat­tle, with fresh US tar­iff ac­tion and Chi­nese re­tal­i­a­tion pos­si­bly as early as March.

The White House has said China had com­mit­ted to start buy­ing more Amer­i­can prod­ucts and lift­ing tar­iff and non-tar­iff bar­ri­ers im­me­di­ately, while be­gin­ning talks on struc­tural changes with re­spect to forced tech­nol­ogy trans­fers and in­tel­lec­tual prop­erty pro­tec­tion.

Sources told Reuters that Chi­nese oil trader Unipec plans to re­sume buy­ing US crude by March af­ter the Xi-Trump deal re­duced the risk of tar­iffs on those im­ports. China’s crude oil im­ports from the US had ground to a halt.

Global fi­nan­cial mar­kets sank to one-week lows yes­ter­day amid the re­newed trade con­cerns, ex­tend­ing Tues­day’s slide. US mar­kets were closed yes­ter­day to ob­serve for­mer Pres­i­dent Ge­orge HW Bush’s death, but the ef­fect of Wall Street’s tur­moil the pre­vi­ous day was felt in Europe and Asia with the bench­mark Shang­hai stock in­dex clos­ing down 0.6%.

“Nar­row agree­ments and mod­est con­ces­sions in the on­go­ing trade dis­pute will not bridge the wide gulf in their re­spec­tive eco­nomic, po­lit­i­cal and strate­gic in­ter­ests,” Moody’s In­vestors Ser­vice said in a re­port that pre­dicted US-China re­la­tions “will re­main con­tentious”. Of­fi­cials from the United States and a num­ber of other ma­jor economies have of­ten crit­i­cised China for its slow ap­proach to ne­go­ti­a­tions and not fol­low­ing through on com­mit­ments.

China has said com­par­a­tively lit­tle about the Trump-Xi agree­ment af­ter se­nior Chi­nese of­fi­cials briefed the me­dia fol­low­ing the meet­ing, and US and Chi­nese ac­counts of what the deal en­tails have some­times dif­fered. “Of­fi­cials now face the dif­fi­cult task of flesh- ing out a deal that is ac­cept­able to the Chi­nese but also in­volves sig­nif­i­cant enough con­ces­sions not to be tor­pe­doed by the China hawks in the Trump ad­min­is­tra­tion,” Cap­i­tal Eco­nom­ics said in a note this week, adding that higher tar­iffs could sim­ply be de­layed.

A Chi­nese of­fi­cial told Reuters that of­fi­cials were “wait­ing for the lead­ers to re­turn” be­fore pub­li­cis­ing de­tails.

Pres­i­dent Xi and his most se­nior of­fi­cials are due back in China on Thurs­day, hav­ing vis­ited Panama and Por­tu­gal since leav­ing Ar­gentina.

Yes­ter­day, the Global Times tabloid, which is run by the Chi­nese Com­mu­nist Party’s main news­pa­per, said the Trump ad­min­is­tra­tion’s state­ments about the deal — in­clud­ing the agree­ment that China would buy $1.2tn in ad­di­tional US goods — were de­signed to high­light or even ex­ag­ger­ate facets of the deal that ben­e­fited the United States.

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