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Global Times

'Substantial progress' viable: MOFCOM

Global Times

By Li Xuanmin Source:Global Times Published: 2019/9/5 20:38:44

US has greater need to make a deal: observers

China and the US will strive to achieve "substantial progress" in the upcoming 13th round of trade consultations in early October in Washington, Chinese officials said on Thursday, which analysts said transmitted a positive signal that both sides were willing to sit down and discuss common goals after being locked in an impasse.

The wording, widely seen as a rare occurrence, led some Chinese analysts to predict that certain headways might actually be made in October such as the removal of tariffs or purchases of agricultural products.

Also important to take from the announcement of a resumption of talks was the calm and abstinence exhibited by Chinese policymakers, they said, amid maximum US pressure ranging from the crackdown on Huawei to meddling in Hong Kong.

China is not letting itself be kidnapped by emotions and retains its own tempo of economic development, the experts said.

Chinese Vice Premier Liu He had a phone call, by invitation, with US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer on Thursday, during which the two sides agreed to hold the 13th round of China-US high-level trade consultations in Washington in early October, China's Ministry of Commerce (MOFCOM) said on Thursday.

In late July during the 12th round of trade talks in Shanghai, China and the US agreed to continue negotiations in Washington in September.

The slightly delayed schedule for the talks came after the US began on Sunday levying a 15 percent tax on an estimated $125 billion of Chinese products including clothing, footwear, sunglasses, cameras, television components, turkeys and beef cuts.

MOFCOM spokesperson Gao Feng told a press briefing on Thursday that the two delegations will strive to achieve "substantial progress" in October on the basis that both teams were fully prepared for the negotiations. The two sides will hold consultations in mid-September to prepare, he said.

Chinese observers noted that any mention of "substantial progress" was quite rare in an official statement with regard to China-US trade talks, raising hopes of breakthroughs in October on issues of common concern.

"The postponement of talks may be a result of both sides having the intention to sit at the trade table so that negotiators need more time to prepare," Huo Jianguo, vice chairman of the China Society for World Trade Organization Studies, told the Global Times on Thursday.

Song Guoyou, director of Fudan University's center for economic diplomacy, also noted that for the talks, both countries will hold a "very serious and sincere attitude" to resolve current difficulties with the aim of preventing worsening trade tensions from plunging into an abyss, leaving no space to recover.

"The US is not as confident now as [it was] when the trade war had just started," Song said.

Compared with China's box of tools to shore up its economy, the US government has more need to make a deal as the US economy and stock market bear the brunt of a boiling trade war, Huo said.

"As the next US presidential election looms, US President Donald Trump himself is also desperately begging for more votes," Huo said. "The most effective option for him is to nail a deal with China to stabilize the US economy."

The US manufacturing Purchasing Managers' Index (PMI) contracted to 49.1 in August amid the trade war, its lowest level in more than three years. And the yield curve of the US Treasury is also inverted, among the most consistent indicators of an economic recession.

Song predicted that at the October talks, China may agree to buy more agricultural goods. On the other hand, he guessed, the US may also "press a pause button" on slapping additional tariffs in December on Chinese goods.

The US plans to levy new tariffs on a remaining $175 billion of Chinese imports on December 15.

Uncertainty ahead

However, the analysts noted that Washington's flip-flopping and aggressive tactics were casting a shadow over the prospects of a deal.

"It's still uncertain whether the US will again play the face-off game to ruin the fruits both sides reached through negotiations," Song said.

Chinese officials have stated that all US tariffs on Chinese imports during the yearlong trade war must be scrapped as part of any trade deal.

Trump has been lashing out at China's trade and economic policies. He tweeted on Tuesday saying that when the US won the trade war, "the deal would get much tougher, and China's supply chain will crumble and businesses, jobs and money will be gone."

Mei Xinyu, an expert close to MOFCOM, told the Global Times Thursday that the US must realize it cannot prod China into a trade deal, otherwise it could render "storming retaliative measures" from the Chinese government.

"As far as I know, Chinese policymakers still have numerous financial tools at hand to hit back at the US and so far they have been quite restrained in responding to US aggression," Mei said.

Chinese government officials were showing extreme calm in trade talks under US maximum pressure tactics, Mei said.

"Policymakers are clear-minded. They have prepared themselves for back-and-forth during the trade war and do not aim for a quick resolution with the US. Rather they're getting fully prepared by prioritizing China's own economic growth."

Zhang Hongpei also contributed to the story

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