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US-China trade talks end

Uwe Hessler
May 4, 2018

Crucial talks aimed at heading off a trade war between China and the US have ended with key differences over tariffs and trade imbalances remaining unresolved. Both sides agreed, however, to keep on talking.

China Peking - US Delegation in Peking zum Handelsstreit
Image: Reuters/J. Lee

China's official Xinhua News Agency reported Friday that crucial trade talks between China and the United States had ended with a consensus on some issues but major disagreements on some others. The two sides had agreed to continue communicating to work toward making more progress.

The high-powered two-day negotiations, included US Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and trade representative Robert Lighthizer on the US side, as well as President Xi Jinping's top economic adviser Liu He at the head of the Chinese delegation.

Read more: Sieren's China: Time for a deal

Comming after weeks of heightened commercial tensions between the world's two largest economies, the officials discussed foreign investment, protection of intellectual property rights and tariffs among other issues.

Several international media outlets reported Friday that Washington had urged China to cut its trade suplus with the US immediately and to stop subsidising advanced technology. According to a document presented to the Chinese delegation ahead of the two-day trade talks which began on Thursday, the US delegation is seeking a deficit reduction by $200 billion (€167 billion) by 2020 from a trade gap totaling $375 billion currently. It is unclear whether or not the US has made progress on the issue as both sides didn't brief the public on the results. 

Read more: Soybean, aircraft and cars: Which US states will suffer most?

Ahead of the meeting, US President Donald Trump said in a message on Twitter that he expected Beijing to provide a "level playing field" for the United States in bilateral trade.

Originally, the Trump administration was seeking to cut the American trade deficit with China by $100 billion and gain concessions over policies that force foreign companies to share technology with Chinese partners.

The US president sparked a series of tit-for-tat exchanges by threatening to impose tariffs worth $150 billion on Chinese goods, prompting China to announce its own tariffs in retaliation.

Hua Chunying, a spokeswoman for China's foreign ministry, told a regular news briefing that it was "not realistic" to expect all issues to be resolved in only one round of negotiations. "Discussions and negotiations should be based on the basis of equality and mutual respect, and the outcome mutually beneficial and win-win," she said Thursday.

'Made in China 2025' in Trump's focus

Chinese diplomats meeting their US counterparts in recent weeks have indicated that Beijing was willing to help reduce America's huge trade deficit and open up its markets to more services and companies from abroad.

However, they dismissed Trump's demand for a huge deficit reduction as both arbitrary and nonsensical. They said the deficit was a result of structural problems such as America's poor infrastructure, US tax policies and consumers' low savings rates that made it harder for the country to compete globally.

For some Chinese officials, Trump's demands are also an indication of US unease about China's rise as an economic and military power, which has grown amid Beijing's recently announced strategy to overtake western industry leaders in advanced technologies.

Under president Xi, a program known as "Made in China 2025" aims to make the country a tech superpower by advancing development of industries that include semiconductors, artificial intelligence, pharmaceuticals and electric vehicles. The plan mostly involves subsidizing Chinese firms, but also requires foreign companies to share their technologies with Chinese partners.

Read more: Trump seeks emergency powers to curb China's tech advance

On that strategic blueprint, however, it looks unlikely that Beijing will relinquish any ground says Yu Miaojie, a professor at Peking University's National School of Development. "The Made in China 2025 industrial policy concerns China's long-term development plan, so the overall direction won't change at all," he told the news agency AP.

And the state-run Global Times newspaper also struck a defiant tone when it said in a commentary on Thursday that it was China's "sovereign right to develop high-tech industry" which was connected to "the quality of rejuvenation of the Chinese nation" that would not be abandoned on external pressure.

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