US, CHINA LEAVE NEXT STEPS FOR TRADE TALKS UN­CLEAR

Techlife News - - SUMMARY -

The United States and China gave no in­di­ca­tion of their next step after wrap­ping up talks aimed at re­solv­ing a tar­iff fight that threat­ens to chill global growth.

The two sides will “main­tain close con­tact,” China’s Min­istry of Com­merce said Thurs­day. But they an­nounced no agree­ments or date for meet­ing again dur­ing the 90-day truce de­clared on Dec. 1 by Pres­i­dents Don­ald Trump and Xi Jin­ping in their fight over Bei­jing’s tech­nol­ogy am­bi­tions.

That un­cer­tainty damp­ened Asian in­vestor sen­ti­ment. Stock mar­kets in Ger­many, France, Ja­pan and China fell back after ris­ing Wed­nes­day fol­low­ing Trump’s com­ment on Twit­ter that the talks were “go­ing well!”

Ne­go­tia­tors fo­cused on China’s pledge to buy a “sub­stan­tial amount” of agri­cul­tural, en­ergy,

man­u­fac­tured goods and other prod­ucts and ser­vices, the U.S. Trade Rep­re­sen­ta­tive said.

How­ever, a USTR state­ment em­pha­sized Amer­i­can in­sis­tence on “struc­tural changes” in Chi­nese tech­nol­ogy pol­icy, mar­ket ac­cess, pro­tec­tion of for­eign pa­tents and copy­rights and cy­ber theft of trade se­crets. It gave no sign of progress in those ar­eas.

It also said the ne­go­ti­a­tions dealt with the need for “on­go­ing ver­i­fi­ca­tion and ef­fec­tive en­force­ment.” That re­flects Amer­i­can frus­tra­tion that the Chi­nese have failed to live up to past com­mit­ments.

A Min­istry of Com­merce spokesman, Gao Feng, said the talks “en­hanced mu­tual un­der­stand­ing and laid the foun­da­tion for ad­dress­ing each other’s con­cerns.”

Trump hiked tar­iffs on $250 bil­lion of Chi­nese goods over com­plaints Bei­jing steals or pres­sures com­pa­nies to hand over tech­nol­ogy.

Wash­ing­ton also wants changes in an ar­ray of ar­eas in­clud­ing the rul­ing Com­mu­nist Party’s ini­tia­tives for govern­ment-led cre­ation of global com­peti­tors in ro­bot­ics, ar­ti­fi­cial in­tel­li­gence and other in­dus­tries.

Amer­i­can lead­ers worry those plans might erode U.S. in­dus­trial lead­er­ship. Chi­nese lead­ers see them as a path to pros­per­ity and global in­flu­ence and are re­luc­tant to aban­don them.

The two sides might be mov­ing to­ward a “nar­row agree­ment,” but “U.S. trade hawks” want to “limit the scope of that agree­ment and keep the pres­sure up on Bei­jing,” Eura­sia Group an­a­lysts Michael Hir­son, Jef­frey Wright and Paul Tri­olo said in a re­port.

“The risk of talks breaking down re­mains sig­nif­i­cant,” they wrote.

White House press sec­re­tary Sarah Huck­abee Sanders ex­pressed op­ti­mism to Fox Busi­ness Net­work. She said Wed­nes­day the tim­ing was un­clear but the two sides are mov­ing to­ward “more bal­anced and re­cip­ro­cal” trade.

Bei­jing has tried to mol­lify Wash­ing­ton and other trad­ing part­ners by promis­ing to buy more of their goods and open its in­dus­tries wider to for­eign com­peti­tors.

Trump has com­plained re­peat­edly about the U.S. trade deficit with China, which last year likely ex­ceeded the 2017 gap of $336 bil­lion.

Economists say the 90-day win­dow is too short to re­solve all the con­flicts be­tween the big­gest and se­cond-big­gest global economies.

“We can con­fi­dently say that enough progress was made that the dis­cus­sions will con­tinue at a higher level,” said Craig Allen, pres­i­dent of the U.S.-China Busi­ness Coun­cil. “That is very pos­i­tive.”

Chi­nese ex­ports to the U.S. have held up de­spite tar­iff in­creases, partly due to ex­porters rush­ing to fill or­ders be­fore more in­creases hit. Fore­cast­ers ex­pect Amer­i­can or­ders to slump this year.

China has im­posed penal­ties on $110 bil­lion of Amer­i­can goods, slow­ing cus­toms clear­ance for U.S. com­pa­nies and sus­pend­ing is­su­ing li­censes in fi­nance and other busi­nesses.

U.S. com­pa­nies want ac­tion on Chi­nese poli­cies they com­plain im­prop­erly fa­vor lo­cal com­pa­nies. Those in­clude sub­si­dies and other fa­vors for high-tech and state-owned

in­dus­try, rules on tech­nol­ogy li­cens­ing and pref­er­en­tial treat­ment of domestic sup­pli­ers in govern­ment pro­cure­ment.

For its part, Bei­jing is un­happy with U.S. ex­port curbs on “dual use” tech­nol­ogy with pos­si­ble mil­i­tary ap­pli­ca­tions. Chi­nese of­fi­cials say their com­pa­nies are treated un­fairly in na­tional se­cu­rity re­views of pro­posed cor­po­rate ac­qui­si­tions, though al­most all deals are ap­proved un­changed.

This week’s talks went ahead de­spite ten­sion over the ar­rest of a Chi­nese tech ex­ec­u­tive in Canada on U.S. charges re­lated to pos­si­ble vi­o­la­tions of trade sanc­tions against Iran.

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