Economy

The Next Phase Of The US-China Trade Negotiations Begins

The Next Phase Of The US-China Trade Negotiations Begins

U.S. Undersecretary for Trade and Foreign Agricultural Affairs Ted McKinney, center, who is part of U.S. trade delegation leaves from a hotel for a second day of meetings with Chinese officials in Beijing, China, Tuesday, Jan. 8, 2019.

If further talks are planned, details will be included in an upcoming announcement, Lu said. "Both sides agreed to keep in close contact", the statement said.

However, people familiar with the negotiations told Reuters on Tuesday the two sides were further apart on Chinese structural reforms that the Trump administration is demanding in order to stop alleged theft and forced transfer of USA technology, and on how China will be held to its promises.

On Wednesday, a clutch of Fed officials said they would be cautious about any further increases in interest rates so the central bank could assess growing risks to an otherwise-solid US economic outlook. After that meeting, top USA officials said China had made an additional $1.2 trillion in trade commitments. U.S. president Donald Trump tweeted without elaborating, as talks wound down late on Tuesday evening in Beijing.

"Actively implementing the important consensus reached by the two heads of state, both sides held broad, in-depth and detailed exchanges on trade issues of mutual concern as well as structural issues".

Also Tuesday, North Korean leader Kim Jong-un arrived in Beijing in a possible effort to co-ordinate with the North's only major ally ahead of a possible meeting with Trump.

Trump agreed to suspend plans to increase tariffs on $200 billion worth of Chinese products from 10 percent to 25 percent while the countries attempt to negotiate a compromise on several issues during the trade talks. Such a move would significantly escalate the months-long trade war between the world's top two economies.

Oil prices jumped more than 4 percent on Wednesday as the extension of U.S. Asian bourses saw a strong finish with Japan's Nikkei and China's blue-chip CSI 300 closing up 1 per cent while the tech-heavy South Korean KOSPI jumped almost 2 per cent.

Latest US-China Trade Talks Focus on China’s Pledge to Buy More US Goods – USTR
US-China trade talks start amid cooling economic growth

Stock markets were roiled last week after Apple (APPL) warned it will badly miss its quarterly sales forecast because of weaker growth in China amid the trade war. These include expanded Chinese purchases of American products, greater protections for United States intellectual property, constraints on Chinese industrial policy, and enforcement and verification of follow-through by China. "That's really good for the cost of money and taking some further headwinds out of the USA dollar", he said.

So far, the US side has described the exchanges in a positive light.

China says it is trying to protect its own economic interests and has accused the USA of violating global trading rules.

It also said Washington and Beijing have discussed the need for the agreement "to provide for complete implementation, subject to on-going verification and effective enforcement".

Trump has been demanding China to drastically reduce the Dollars 375 billion trade deficit and ensure IPR production for USA technology and services.

Heightened risk appetite boosted U.S. Treasury yields to the highest this year, while the U.S. dollar extended losses after minutes from a December 18-19 Federal Reserve policy meeting showed many Fed policymakers said the central bank could be patient on future rate hikes. But if a deal doesn't happen, remember, "I am a Tariff Man", Trump said. Chinese officials have suggested they could revise some of their industrial plans but have but won't abandon larger goals that they consider a path to prosperity and global influence. 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 USA export and investment curbs, such as controls on "dual use" technology with possible military applications.

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