China-US talks to cool trade war

  • 05/05/2018
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A visiting US trade delegation and Chinese officials have "reached consensus in some areas". Photo credit: File

US and Chinese officials have agreed to establish a mechanism to work on trade-related issues despite "big differences" between them, capping two days of discussions in Beijing, Chinese state media reported Friday.

A visiting US trade delegation and Chinese officials have "reached consensus in some areas" and are committed to addressing trade frictions through dialogue, Xinhua news agency reported.

"The two sides recognised that there are still big differences on some issues and that they need to continue to step up their work and make more progress," Xinhua said.

A Chinese Commerce Ministry spokesman also said Chinese officials raised the issue of US sanctions against China's telecom equipment maker ZTE with their American counterparts, who promised to discuss it with US President Donald Trump.

Washington in April banned all US companies from selling technology to ZTE for illegally shipping equipment to North Korea and Iran.

The Chinese and US officials convened after weeks of heightened commercial tensions between the world's two largest economies. During two days of meetings at the Diaoyutai state guesthouse in Beijing, they discussed foreign investment, intellectual property rights protection and tariffs, among other issues.

The US delegation, led by Treasury Secretary Steven Mnuchin, also included Commerce Secretary Wilbur Ross, US trade representative Robert Lighthizer, National Economic Council director Larry Kudlow and White House trade adviser Peter Navarro.

They met with Chinese Vice Premier Liu He, who is President Xi Jinping's top economic adviser.

Trade tensions between Washington and Beijing have escalated in recent weeks, after the US threatened punitive tariffs on US$150 billion worth of Chinese imports and Beijing announced its own list of tariffs on US$50 billion worth of US imports, including soybeans, cars and aircraft.

The conflict is centred around China's alleged intellectual property theft and its "Made in China 2025" strategy, which aims to bolster emerging industries such as robotics, semiconductors and electric vehicles.

US leaders have asked that the Chinese government stop subsidizing these industries, but Beijing is unwilling to compromise its high-tech development targets, experts say.

The Trump administration has also requested that China curb the annual trade surplus with the US by US$100 billion, a demand stamped as "unrealistic" by Chinese state-run tabloid Global Times.

The discussions in Beijing have likely revealed the gulf between the two sides' demands and the difficulty in bridging it, said economist Lawrence Brainard with TS Lombard in London.

In the end, the two sides probably reached consensus in some broad areas, such as that the US trade deficit with China needs to be reduced and that Beijing must strengthen intellectual property protection, said independent economic commentator Hu Xingdou.