China to send delegation for United States talks to avert trade war

Gladys Abbott
August 16, 2018

Vice Minister to meet with US Treasury UnderSecretary Malpass.

Liu Weidong, a USA affairs expert at the Chinese Academy of Social Sciences, said a key aspect of Wang's visit was to check whether further formal dialogue between the two nations was possible.

China will hold a fresh round of trade talks with the United States in Washington later this month, Beijing said on Thursday, offering a glimmer of hope for progress in resolving a conflict that has set world financial markets on edge.

News of the talks boosted China's yuan currency and its stock markets, which have been hit hard by negative sentiment related to the trade war and a slowing domestic economy.

"The lower rank of the delegation suggests that both sides remain far apart, and an agreement reached for this visit is very unlikely", Jonas Short, head of the Beijing office at investment bank Everbright Sun Hung Kai, wrote in a note.

Sentiment in oil markets was also cautious due to the rise in USA crude production and storage levels, as well as weakness in emerging market economies, particularly in Asia, that could limit demand growth.

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Washington is due to activate additional tariffs on $16 billion of Chinese goods on August 23, and Beijing has said it will respond in kind. The invitation for talks may have been meant to steady markets, they said.

"Wang Yiwei, a professor at Renmin University's global studies, said Wang's trip follows the Communist Party's annual closed door meeting at the Beidahe resort, where the trade war was likely to have been one of the main topics of discussion".

Following that, Washington imposed its first round of 25 tariffs on $34 billion of Chinese goods on July 6 in response to complains Beijing steals or pressures foreign companies to hand over technology.

It still is not clear if China's delegation will carry with it a reform offer serious enough to stave off the Trump administration's threat of former tariffs.

"It is possible that China may stress to the U.S. that China will continue reform", he said.

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