BEIJING - Derailed trade talks may be back on track and while China appeared to have scored some early concessions from the United States in Osaka, it is keeping expectations back home in check as it prepares for a tough negotiation that may not in the end amount to a deal.
Chinese state media took a cautious tack and were quick to acknowledge the difficulties ahead while reiterating that China is not afraid of fighting a trade war.
A lengthy editorial by the nationalistic Global Times on Sunday (June 30) said the Chinese were "well-prepared for any possible uncertainty in future trade talks".
"The path of China's development will not always be smooth and that is accepted by the Chinese public. Chinese people will not be surprised by any potential turmoil in China-US economic and trade relations, and they know China will handle it accordingly," it added.
China has toughened its rhetoric since the 11th round of talks collapsed in May and relations with the US soured.
Washington accused Beijing of pulling back its commitments while China said the US kept changing its demands and refused to lift punitive tariffs.
The US also insisted that China withdraw state subsidies in key industries and accept a monitoring mechanism to track its progress on these reforms, which Beijing found hard to stomach.
The world's two biggest economies have been locked in a protracted trade dispute with tit-for-tat tariff moves that have disquieted businesses and global markets.
But things took an upturn on Saturday (June 29) after Chinese President Xi Jinping and US President Donald Trump agreed on the sidelines of the Group of 20 (G-20) summit to return to the negotiating table.
In a press conference after their meeting, Mr Trump said he would withhold new tariffs on Chinese goods, issue visas to Chinese students and allow American businesses to resume selling parts to Chinese tech giant Huawei.
China has also promised to buy a "tremendous" amount of US agricultural products, he added.
China hawks were quick to chide Mr Trump for giving in to Beijing, especially his climbdown on Huawei, but China has been careful in taking that concession for granted.
Mr Wang Xiaolong, the Foreign Ministry's special envoy for G-20 affairs and head of the ministry's Department of International Economic Affairs, told reporters that if the US does what it says about Huawei, "we will certainly welcome that".
An editorial in the official China Daily was more circumspect.
"Even though Washington agreed to postpone levying additional tariffs on Chinese goods to make way for negotiations, and Trump even hinted at putting off decisions on Huawei until the end of negotiations, things are still very much up in the air, and that is how they will no doubt remain until a deal is formally signed, sealed and delivered," it said on Saturday.
Huawei was put on the US Commerce Department's entity list in May, which bars it from doing business with US companies.
Even though a trade deal is said to be 90 per cent completed, the two sides remain far apart on outstanding issues such as state support for China's high-tech industries, and an enforcement mechanism to make sure Beijing stays in line.
While China has acknowledged that it will benefit from some of these reforms, it cannot be viewed as taking them on under pressure from the US, a dilemma it is now facing, says Mr Steven Okun, senior adviser at advisory firm McLarty Associates.
"There is a deal to be had if President Trump recognises the political needs of President Xi and finds a manner in which to negotiate an agreement that is 'equitable'. Or, there is a deal to be had if President Trump determines it is in his interest to reach an agreement in which China does not need to address all of the unfair trade practices outlined in the original US findings," Mr Okun said.
The findings refer to an investigation by the US Trade Representative which last year found China to have engaged in forced technology transfer, intellectual property violations and theft of trade secrets. The report triggered the first set of US tariffs on US$50 billion (S$67.7 billion) worth of Chinese imports.
Just a day after China and the US agreed to more talks, China's state planner announced that it has opened up more sectors to foreign investment, including oil and gas exploration, agriculture, mining and manufacturing.
The National Development and Reform Commission on Sunday published on its website a shortened list of industries that face foreign investment restrictions, making good its promise to open its markets wider to foreigners. Last year, it eased curbs on the banking, automobile and insurance sectors.