Trade talks between the United States and China seem on track to resume soon, bringing some relief to markets spooked by fresh tit-for-tat measures by both sides last Friday.
"China has taken a very hard hit over the last number of months; I believe they want to do a deal," US President Donald Trump told reporters at a joint press conference with his French counterpart Emmanuel Macron, at the close of a two-day Group of Seven summit in Biarritz, France.
"They have devalued their currency, manipulated their currency," Mr Trump maintained. But he added: "I think President Xi (Jinping) is a great leader who happens to be a brilliant man and he can't lose three million jobs in a very short period of time. I think they want to make a deal. I'm not sure they have a choice; I'm not saying that as a threat."
Mr Trump insisted that he would not make a deal unless it was a "fair and good" one for the US.
Earlier, he said that talks would resume "very shortly", telling reporters: "We've got two (phone) calls, very, very good calls, very productive calls. They mean business."
In Chongqing, China, Vice-Premier Liu He said: "We are willing to resolve the issue through consultations and cooperation in a calm attitude and resolutely oppose the escalation of the trade war.
"We believe the escalation of the trade war is not beneficial for China, the United States, nor to the interests of the people of the world," he said at the opening of the 2019 Smart China Expo.
The news of fresh negotiations provided a slight boost of just over 1 per cent to the Dow Jones index when it opened for trading in the morning. Asian markets also recovered slightly although they remained mostly in the red.
US Treasury Secretary Steve Mnuchin, who is also in France, indicated that there had been a phone conversation with Mr Liu although it was not clear if this was out of the ordinary. The two sides were anyway due to hold another round of negotiations in the US next month.
But Chinese officials remained coy about the call, with Foreign Ministry spokesman Geng Shuang telling reporters in Beijing that he had not heard of it.
Mr Hu Xijin, editor-in-chief of the state-owned Global Times, tweeted: "Based on what I know, Chinese and US top negotiators didn't hold phone talks in recent days."
He said: "The two sides have been keeping contact at technical level. China didn't change its position. China won't cave in to US pressure."
When asked for specifics, Mr Trump was ambiguous, telling reporters: "I don't want to talk about calls. We've had calls. We've had calls at the highest levels."
But referring to Mr Liu's appeal for calm, Mr Trump said: "Calm. It's a very good word to use. It's not a word I use that often."
Earlier, on the weekend, when asked if he had second thoughts about the trade war, Mr Trump said he did. But hours later, the White House clarified that his second thoughts were that he should have been even tougher on China.
US markets plunged last Friday after China announced retaliatory tariffs on US$75 billion (S$104 billion) of US-made products, and President Trump responded by raising tariffs from 25 per cent to 30 per cent on US$250 billion worth of Chinese goods. He also increased tariffs on the remaining US$300 billion of Chinese goods from 10 per cent to 15 per cent.
While China faces pressure at home due to the punitive measures by the US, the trade war is also expected to impact the US economy, with businesses and markets worrying that it could hasten an economic slowdown or a recession.