By Bob Davis in Washington and Lingling Wei in Beijing 

The U.S. and China started the latest round of trade talks with a phone call involving Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He.

The three senior officials discussed Chinese purchases of agricultural products and changes to fundamental Chinese economic policies during the phone call, said people familiar with the conversation. They didn't provide further details.

As part of the trade truce reached between Mr. Xi and Mr. Trump, Chinese officials are also considering making changes to the Made in China 2025 plan, a state-led industrial policy aimed at enabling Chinese companies to dominate a number of industries such as artificial intelligence and robotics, said people familiar with the matter. The policy is a focal point of the U.S.'s complaints that Beijing engages in unfair trade practices that put foreign firms at a disadvantage to Chinese companies.

China's Commerce Ministry, in a brief statement, said the conversation--held Monday evening in the U.S., Tuesday morning in China--was meant to "push forward with next steps in a timetable and road map" for negotiations. Mr. Liu plans to travel to Washington after the new year, people familiar with the matter said.

The call follows up the 90-day tariff cease-fire agreed to by Presidents Trump and Xi Jinping this month.

U.S. and Chinese officials have said that Beijing has planned to announce purchases of soybeans as a goodwill gesture in the talks which are expected to conclude around March 1.

During the negotiations, the U.S. said it won't raise tariffs on $200 billion of Chinese goods to 25% from 10%, as it had planned to do on Jan. 1.

By holding the phone call, both sides are suggesting a willingness to keep the negotiations from getting derailed by Chinese anger at the arrest in Canada at the U.S. request of a senior executive at China's Huawei Technologies Co. The executive, Meng Wanzhou, is the daughter of Huawei's founder, and the U.S. is seeking her extradition for allegedly misleading banks about the telecommunications equipment giant's business in Iran to evade U.S. sanctions.

Chinese Foreign Minister Wang Yi said in remarks Tuesday that Beijing would firmly resist "acts of bullying that wantonly infringe upon the legitimate rights and interests of Chinese citizens." His spokesman later told reporters Mr. Wang was referring to all such instances, including Ms. Meng's case.

Still, state media and social-media censors have been careful not to stir up anti-U.S. sentiment, in an apparent effort to separate the Huawei issue from the trade negotiations. President Xi has instructed his lieutenants to follow through on the agreement he reached with Mr. Trump, according to Chinese officials.

Previously, Mr. Liu, China's chief trade negotiator has dealt directly with Mr. Mnuchin. Mr. Trump named Mr. Lighthizer as the lead negotiator on China issues and informed Mr. Xi while they discussed the truce over dinner in Buenos Aires on Dec. 1.

Having both the Treasury secretary and trade representative on the phone call suggests that Treasury will continue to have a significant role in China talks. In the past, Treasury has focused on the financial-services sector.

Among the stickiest structural issues the U.S. wants addressed in the talks is protection of intellectual property. Beijing has denied U.S. allegations that it requires foreign companies seeking to do business in China to hand over technology. As part of the Trump-Xi agreement, Beijing is willing to discuss longstanding U.S. complaints about the lax intellectual property protections in China, and Chinese officials acknowledge it is in the country's interest to strengthen enforcement.

Wu Handong, an adviser to China's Supreme People's Court, told The Wall Street Journal on Tuesday that China is speeding up approving a revised patent law in part to address U.S. concerns. Mr. Wu said the draft was submitted to China's legislature earlier this month and is expected to be approved next year. Revisions, he said, would subject violators to greater administrative penalties and fines.

Liyan Qi and Grace Zhu contributed to this article.

Write to Bob Davis at bob.davis@wsj.com and Lingling Wei at lingling.wei@wsj.com

 

(END) Dow Jones Newswires

December 11, 2018 05:38 ET (10:38 GMT)

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