China optimistic as trade negotiations with U.S. kick off

Gladys Abbott
January 8, 2019

The two-day trade summit began on Monday and is the first face-to-face meeting between both sides since Chinese President Xi Jinping and US President Donald Trump met last month in Argentina.

Mr Trump had said on Sunday (Jan 6) that trade talks with China were going very well, noting that the weak Chinese economy was giving Beijing an incentive to negotiate and reach a deal.

Should China reform its regulation policies to allow more US access to its markets, USA negotiators want guarantees that they won't erase newfound openness by using government authority to block American companies. "Their economy's not doing well", Trump was quoted as telling reporters at the White House. "I don't think it will proceed that fast".

The South China Morning Post, citing a person familiar with the matter, reported that Trump plans to meet Chinese Vice President Wang Qishan on the sidelines of the World Economic Forum in Switzerland, held on January 22 to 25. Trump wants Beijing to roll back initiatives like "Made in China 2025", which calls for the state-led creation of global competitors in such fields as robotics and artificial intelligence.

Last year, Trump imposed tariff hikes of up to 25 percent on $250 billion of Chinese goods, with China retaliating with its own tariff increases on $110 billion of USA exports.

China accuses the United States of violating global law after an American navy destroyer sailed near islands claimed by Beijing in the South China Sea. Ahead of the midterms, Beijing attempted to sway voters in those states by running advertorials depicting the US trade tariffs negatively in a major Iowa newspaper.

Asian markets were broadly higher on Monday after strong data lifted indexes on Wall Street.

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By Monday evening, few details had emerged of the trade talks, which were scheduled to run through Tuesday.

"Adding to that, there are concerns over state-sponsored cybersecurity attacks and a slowdown in Chinese economic growth, which itself has roiled markets", Noguchi said. President Xi Jinping responded by imposing penalties on $110 billion of American goods, slowing customs clearance for US companies and suspending issuing licenses in finance and other businesses.

The United States has long complained about access to the vast Chinese market and Beijing's demands USA companies reveal their technology advances.

"It certainly has hurt the Chinese economy", Ross told CNBC.

It's possible that if Trump, who's making his second trip to Davos as president, doesn't meet with Wang, one or more of his top trade lieutenants will instead. In exchange, Trump agreed to put on hold a planned increase in tariffs on $200 billion (€175 billion) in imports from China.

Apple has been pretty clear that it will make much less money this quarter, and it's been even clearer that a simmering trade war with China is an enormous factor in that revenue disappointment.

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