High-level dialogue raises hopes of deal on Sino-American trade

Stark differences between the United States and China were on display at last Friday's dialogue between their defence chiefs and top diplomats, but the meeting still raised hopes among Chinese experts that both sides would be able to progress in solving deep-rooted trade issues.

The security and diplomatic dialogue - attended by Chinese State Councillor Yang Jiechi, Defence Minister Wei Fenghe, US Secretary of State Michael Pompeo and Defence Secretary James Mattis - was a significant and positive step forward, they said.

While both countries' positions on issues including Taiwan and the South China Sea differed, each stressed the importance of cooperation. They also agreed to develop a framework for military-to-military conflict de-escalation and communication.

Mr Yang said that China was committed to resolving trade issues through negotiation, while Mr Pompeo said bilateral cooperation remained essential despite their differences.

The meeting is the latest sign that tensions between the world's two biggest economies could be easing.

"The fact that this dialogue took place and was not postponed again is a very positive sign, and helpful to solving the trade issue," said Dr Wang Huiyao, president of Beijing-based think-tank Centre for China and Globalisation.

The security dialogue was originally scheduled to be held in Beijing last month, but was postponed after ties soured over trade, Taiwan and the South China Sea.

China and the US are locked in a trade war over what Washington views as China's unfair trade practices. Both sides have levied tariffs on hundreds of billions of dollars of each other's goods.

But some experts are hoping an agreement on trade can be reached when Chinese President Xi Jinping and US President Donald Trump meet at the Group of 20 Summit in Argentina at the end of this month.

This follows a phone call between the two leaders earlier this month.

At a forum in Singapore last week, Chinese Vice-President Wang Qishan also signalled that China was ready to work for a solution acceptable to both sides.

In the run-up to last Friday's dialogue in Washington, Chinese state media painted it as an opportunity for the two sides to mend ties and resolve disputes. Yesterday, nationalist tabloid Global Times said: "Rarely under the current circumstances have both sides expressed such constructive attitudes."

Associate Professor Li Mingjiang of the S. Rajaratnam School of International Studies in Singapore said recent developments seem to signal that Beijing is prepared to make "significantly more concessions" on trade. "Some of those new concessions may, to some extent, pacify the Americans and satisfy their demands, but Washington must also be realistic in its expectations," he said.

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A version of this article appeared in the print edition of The Sunday Times on November 11, 2018, with the headline High-level dialogue raises hopes of deal on Sino-American trade. Subscribe