BEIJING (AFP, BLOOMBERG, CHINA DAILY/ASIA NEWS NETWORK) - China will send a senior negotiator to the United States in late August to resume trade talks, the Commerce Ministry said on Thursday (Aug 16), the first public meeting on the subject in weeks as the trade conflict between the two countries intensifies.
Vice-Commerce Minister Wang Shouwen, the deputy representative on international trade negotiations, will meet a senior US treasury official, Mr David Malpass, at the invitation of the US, the ministry said in a statement.
Mr Wang will lead a delegation to discuss bilateral trade issues with a team led by Mr Malpass, Secretary of Treasury for International Affairs.
"The Chinese side reiterates that it opposes unilateralism and trade protectionism practices and does not accept any unilateral trade restriction measures,” the ministry said. “China welcomes dialogue and communication on the basis of reciprocity, equality and integrity.”
The news buoyed risk sentiment in Asian trading, with futures on the S&P 500 Index rallying as much as 0.4 per cent. The offshore yuan gained against the dollar for the first time in seven days.
“This will be ‘talks about trade talks,’” said Mr Gai Xinzhe, an analyst at the Bank of China’s Institute of International Finance in Beijing. “Lower-level officials will meet and haggle and see if there is a possibility for higher-level talks.”
China’s equity market has suffered declines and the yuan has been on a losing streak for more than a month. Chinese authorities, bracing for an economic fallout, have introduced measures to support growth ranging from shifting towards a more accommodative monetary policy to boosting fiscal spending.
US Commerce Minister Wilbur Ross held talks with Chinese Vice-Premier Liu He in Beijing in June. But the discussions failed to reduce tensions as the United States slapped tariffs on US$34 billion (S$47 billion) worth of Chinese goods in early July, triggering an immediate dollar-for-dollar retaliation from Beijing.
The two countries plan to launch a new round of tit-for-tat tariffs on US$16 billion worth of goods from each country on Aug 23. Washington has also lined up an additional US$200 billion in Chinese imports and US President Donald Trump said he could raise tariffs on those products to 25 per cent instead of the previously touted 10 per cent.
“It is hard to tell how the talks will go but it’s a positive signal that the two countries are looking for some compromise plan,” said Mr Makoto Sengoku, market analyst at Tokai Tokyo Research Institute.
“If they were determined to fight it out, they wouldn’t meet,” he told AFP.
Chinese officials say the tariffs have yet to make an impact on the country’s economy, with its exports even beating forecasts in July. But analysts warned that China could feel the full effect of tariffs in August.
Mr Trump has boasted that trade wars are “easy to win” and warned he would hit virtually all Chinese imports if Beijing does not back down and take steps to reduce its US$335 billion surplus with the US.
China does not import enough from the United States to match Washington dollar-for-dollar, but it has warned that it could fire back with other measures.
The yuan has declined in recent weeks, helping Chinese exporters as it makes their products cheaper, but it could fuel tensions with Mr Trump, who has accused Beijing of manipulating its currency.
Mr Wang, who is the key official leading China’s trade talks worldwide, led an advance team to Washington in May. In a July interview, he told Bloomberg that he didn’t understand why the US quickly reversed its course.
“Good faith negotiation is required,” Mr Wang said then. “For any talk to be successful, no party should point a gun at the other party.”
Economists weren’t expecting much from the planned talks. “Malpass has no trade authority,” said Dr Derek Scissors, chief economist at the China Beige Book. “But nice for Chinese stocks.”