US and China discuss agriculture and economic policies in new round of trade talks
China promises changes to Made in China 2025 plan following complaints from US over its dominance
The US and China started the latest round of trade talks with a phone call involving Treasury secretary Steven Mnuchin, US trade representative Robert Lighthizer and Chinese vice-premier Liu He.
The three senior officials discussed Chinese purchases of agricultural products and changes to fundamental Chinese economic policies, said people familiar with the conversation. They did not provide further details.
As part of the trade truce reached between Chinese President Xi Jinping and US President Donald Trump, Chinese officials are also considering making changes to the Made in China 2025 plan, a state-led industrial policy aimed at enabling Chinese companies to dominate a number of industries such as artificial intelligence and robotics, said people familiar with the matter.
The policy is a focal point of the US’s complaints that Beijing engages in unfair trade practices that put foreign firms at a disadvantage to Chinese companies.
China’s commerce ministry said the conversation was meant to “push forward with next steps in a timetable and road map” for negotiations. Liu plans to travel to Washington after the new year, people familiar with the matter said.
On Tuesday morning, Trump wrote on Twitter that “very productive conversations” were taking place with China. “Watch for some important announcements!” Trump aides say the US president sometimes tweets positive news about China talks to try to boost the stock market. Futures trading suggested a strong opening on the New York Stock Exchange.
The phone call follows up on the 90-day tariff ceasefire agreed to by Trump and Xi in December.
US and Chinese officials have said that Beijing has planned to announce purchases of soya beans as a goodwill gesture in the talks, which are expected to conclude around March 1.
During the negotiations, the US said it will not raise tariffs on $200bn of Chinese goods to 25% from 10%, as it had planned to do on January 1. By holding the phone call, both sides are suggesting a willingness to keep the negotiations from getting derailed by Chinese anger at the arrest in Canada at the US request of a senior executive of China’s Huawei Technologies.
The executive, Meng Wanzhou, is the daughter of Huawei’s founder, and the US is seeking her extradition for allegedly misleading banks about the telecommunications equipment giant’s business in Iran to evade US sanctions.
Chinese foreign minister Wang Yi said in remarks on Tuesday that Beijing would firmly resist “acts of bullying that wantonly infringe upon the legitimate rights and interests of Chinese citizens”. His spokesman later told reporters Wang was referring to all such instances, including Meng’s case. Still, state media and social-media censors have been careful not to stir up anti-US sentiment, in an apparent effort to separate the Huawei issue from the trade negotiations.
Xi has instructed his lieutenants to follow through on the agreement he reached with Trump, according to Chinese officials. Previously, Liu, China’s chief trade negotiator, has dealt directly with Mnuchin.
Trump named Lighthizer as the lead negotiator on China issues and informed Xi while they discussed the truce over dinner in Buenos Aires on December 1. Having both the Treasury secretary and trade representative on the phone call suggests that the Treasury will continue to play a significant role in China talks. In the past, the Treasury has focused on the financial-services sector.
Among the stickiest structural issues the US wants addressed in the talks is protection of intellectual property. Beijing has denied US allegations that it requires foreign companies seeking to do business in China to hand over technology. As part of the Trump-Xi agreement, Beijing is willing to discuss longstanding US complaints about the lax intellectual property protections in China, and Chinese officials acknowledge it is in the country’s interest to strengthen enforcement.
Wu Handong, an adviser to China’s Supreme People’s Court, told The Wall Street Journal on Tuesday that China is speeding up approving a revised patent law in part to address US concerns. Wu said the draft was submitted to China’s legislature earlier in December and is expected to be approved in 2019. Revisions, he said, would subject violators to greater administrative penalties and fines. — Wall Street Journal