China Offers Official Reassurance on Trade Talks With U.S. -- 2nd Update
December 05 2019 - 3:22PM
Dow Jones News
BEIJING -- China's trade negotiations with the U.S. remain on
track, Beijing said, offering official reassurance after tensions
flared between the world's two biggest economies over human-rights
issues in China.
China's Commerce Ministry said Thursday that the negotiating
teams from both sides have maintained close communication, though
it didn't provide details on progress. The recent strain had
spooked investors and stoked concerns over the global economic
outlook.
"If China and the U.S. strike a phase-one deal, relevant tariffs
should be reduced," Commerce Ministry spokesman Gao Feng said,
referring to a proposed interim agreement the two sides are trying
to reach.
Over the past few days, though, officials in the U.S. have
become less optimistic about a deal. The two sides remain at odds
over the value of farm goods Beijing will buy from the U.S., with
President Trump looking for $40 billion to $50 billion a year
within two years. That is an enormous increase from the $8.6
billion last year -- and twice as much as China bought from the
U.S. before the trade war began in earnest in 2018.
The administration wants Beijing to publicly state its
purchasing plans -- and not to condition them on market
circumstances or China's trade obligations, said people familiar
with the discussions. Beijing is reluctant to make that pledge
because it might have to divert purchases from other trading
partners that are bound to object.
Additionally, the two sides haven't yet agreed on how deep a
reduction in tariffs the U.S. would make. Currently, the U.S. has
tariffs on about $360 billion of Chinese goods. Unless there is a
deal by Dec. 15, the U.S. is threatening 15% tariffs on $165
billion more in Chinese imports.
While the U.S. side is willing to skip the next tariff increase,
Mr. Trump and U.S. Trade Representative Robert Lighthizer are
reluctant to start scrapping tariffs. Their willingness to do so
depends largely on how many farm goods the Chinese will buy -- and
how firmly it will commit to the purchases, say the people familiar
with the talks.
Tensions between the U.S. and China rose in recent days over two
U.S. bills supporting human rights in Hong Kong and in China's
western region of Xinjiang. Both bills triggered objections from
Beijing and vows of retaliation.
The state-run tabloid Global Times said earlier this week that
China would soon publish an "unreliable entity list," which could
lead to sanctions against U.S. companies, organizations and
individuals. The newspaper said on Twitter that the Xinjiang bill
would harm China's interests and prompt Beijing to speed up the
rollout of a blacklist of foreign entities that are harmful to
Chinese businesses and national security.
In a separate squabble over restrictions on diplomats, a person
familiar with Chinese Foreign Ministry policy said Thursday that
Beijing is now requiring U.S. diplomats to inform the ministry five
days in advance of meeting with Chinese local government officials
and research or educational institutions. The new rule is
retaliation for restrictions put on Chinese diplomats in the U.S.
and was earlier reported by a Chinese publication called the
Paper.
Reached late Thursday, a U.S. Embassy spokesman in Beijing
declined to comment.
The U.S. rights legislation, which would require sanctions
against Chinese officials involved in the repression of Uighur
Muslims in the far-western Chinese region of Xinjiang, was passed
by the House of Representatives this week and must be reconciled
with a bill the Senate previously passed before it can be sent to
Mr. Trump to sign into law.
Last week, Mr. Trump signed a bill designed to show solidarity
with pro-democracy protesters in Hong Kong.
In Thursday's weekly briefing, Mr. Gao didn't provide further
comment on the U.S. legislation and declined to give a time frame
for any foreign entity blacklist.
China initially threatened to publish the company blacklist in
May, shortly after the U.S. blacklisted Huawei Technologies Co.,
limiting the Chinese telecom-gear maker's ability to obtain
American technology.
On Tuesday, President Trump suggested that trade talks with
China could continue well into next year. The Dow Jones Industrial
Average reacted with its biggest single-day decline since early
October, even though some investors and analysts interpreted Mr.
Trump's comments as an effort to gain leverage before Dec. 15, when
new tariffs on consumers are set to take effect.
A day later, Mr. Trump said the trade talks were going "very
well."
Mr. Gao declined to comment on whether the two nations could
make a deal before that deadline, but he reiterated that some
tariffs should be rolled back for the two countries to reach a
phase-one deal.
The phase-one deal would include Chinese pledges to buy billions
of dollars in U.S. farm goods, liberalize its financial sector and
strengthen its intellectual-property protection.
But the deal would likely cover only a portion of the U.S.
complaints against China, leaving out sticking points like China's
coercion of technology transfers from U.S. companies and government
subsidies for state-owned companies, U.S. officials have said.
--Grace Zhu and Eva Dou in Beijing and Bob Davis in Washington
contributed to this article.
(END) Dow Jones Newswires
December 05, 2019 15:07 ET (20:07 GMT)
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