Top-level US-China trade talks to restart later this week amid fading hopes of an interim deal

The talks will take place on Oct 10 and 11 in Washington.
The talks will take place on Oct 10 and 11 in Washington.PHOTO: AFP

BEIJING - China's top trade negotiators will head to the United States later this week amid fading optimism that both sides might be able to reach an interim deal to stem the damage from a bruising trade war.

The talks will take place on Oct 10 and 11 in Washington, under the shadow of impending tariffs by the US which are due to kick in next Tuesday (Oct 15). The atmosphere has been made more tense by President Donald Trump's comments that how China handles the ongoing protests in Hong Kong could affect the outcome of negotiations.

Deputy-level trade negotiators kicked off working-level talks in Washington on Monday, in preparation for the ministerial-level talks later this week that will be led by Vice-Premier Liu He on the Chinese side.

Experts say that both countries have been battered by the 15-month-long trade war, but while conditions are ripe for an interim deal, the outcome was still uncertain.

"We are at the stage where both sides are testing the other's determination. At this point, both the US' and China's interests and bottomlines should be very clear now," said Tsinghua University professor Zhao Kejin.

China's Commerce Ministry on Tuesday (Oct 8) said in a statement that Mr Liu would lead a delegation comprising Commerce Minister Zhong Shan, People's Bank of China governor Yi Gang, and officials from the agriculture ministry, information technology ministry and economic planning body, the National Development and Reform Commission.

The brief statement said the Chinese team would meet US Trade Representative Robert Lighthizer and the US Treasury Secretary Steven Mnuchin.

Notably, Mr Liu will not be heading to Washington this time holding the title of "special envoy" of Chinese President Xi Jinping, which he held in some of the previous 12 rounds of negotiations - suggesting that Mr Liu might have less authority to make concessions to cut a deal.

The latest round of trade talks - the 13th so far - is the first top-level talks since negotiations ended without result in July. Since then both sides have imposed additional tariffs on each other, ratcheting up the temperature.

The latest round will kick in on Tuesday, when the US is expected to raise tariffs on US$250 billion worth of Chinese products from 25 per cent to 30 per cent.

 
 
 
 

The US' Commerce Department on Monday (Oct 7) also announced that it was blacklisting 28 Chinese public security bureaus and companies, over Beijing's treatment of Uighur Muslims.

Mr Andy Mok, a senior research fellow at the Centre for China and Globalisation, a Beijing-based think-tank, said the move was likely timed precisely to "put pressure on the Chinese side, and put them on the defensive" just as talks got under way.

Taoran Notes, a blog run by the official Economic Daily, said in a commentary on Tuesday that while restarting negotiations was a good thing, the current situation was "complex".

It said a continuation of what the Chinese have termed "talking while fighting" as one of three likely outcomes from the talks. The other two were - reaching a fair agreement, or a complete collapse of negotiations.

"China wants a good result, but it doesn't need to force such an outcome," it wrote.

Shanghai-based Professor Shen Dingli said whether or not a deal could be struck hinges on whether Mr Trump, mired in impeachment proceedings, decides if an interim deal would allow him to score political points against his domestic rivals.

"Under such circumstances, if Trump is willing to make a deal it doesn't exclude the possibility that China's leaders will decide to make more compromises... but if Trump decides to play hardball, then Xi will also play hardball with him," said Prof Shen.