BEIGJING (BLOOMBERG) - China is still open to agreeing a partial trade deal with the US, an official with direct knowledge of the talks said, signalling that Beijing is focused on limiting the damage to the world's second-largest economy.
Negotiators heading to Washington for talks starting on Thursday (Oct 10) aren't optimistic about securing a broad agreement that would end the trade war between the two nations for good, said the official, who asked not to be named as the discussions are private.
But China would accept a limited deal as long as no more tariffs are imposed by President Donald Trump, including two rounds of higher duties set to take effect this month and in December, the official said. In return, Beijing would offer non-core concessions like purchases of agricultural products without giving in on major sticking points, the official said, without offering further details.
S&P 500 futures rose 0.9 per cent on the news and the offshore yuan extended gains.
The Ministry of Commerce didn't immediately reply to faxed questions.
The latest round of trade talks come just days after the White House announced the blacklisting of Chinese technology firms over their alleged role in oppression in the far west region of Xinjiang, as well as visa bans on officials linked to the mass detention of Muslims. At the same time a fight over free speech between China and the National Basketball Association, triggered by a tweet backing Hong Kong's protesters, showed the widening gap between the countries.
"I think there might be big breakthrough in the coming trade talks as both sides have expressed good gestures and positive signals," said Huo Jianguo, a former Chinese Commerce Ministry official who is now vice-chairman of the China Society For World Trade Organisation Studies. "The recent blacklist and sanctions from the US is just another usual tactic to showcase that it has multiple tools in the trade negotiations in line with Trump's maximum pressure policy. It is hardly surprising to us and we shouldn't take it too seriously."