US, China planning new round of trade talks

Marco Green
April 18, 2019

The Wall Street Journal reported that United States negotiators would return to Beijing at the end of the month.

Long considered the ballast in a relationship fraught with geopolitical frictions, the USA business community in China in recent years has advocated a harder line on Beijing's trade policies.

"Many of our longstanding concerns about the business environment in China remain unaddressed", the chamber said in a statement.

Investment in construction will support growth but "the outlook is cloudier for the rest of China's economy" due to weak auto sales and a global manufacturing slowdown, Bill Adams of PNC Financial Services Group said in a report.

Another issue is over what the USA calls China's preferential subsidies to state-owned firms.

China has responded with its own tit-for-tat tariffs on US goods.

It noted then that 19 percent of its companies were adjusting supply chains or seeking to source components and organize assembly outside of China as a result of tariffs.

But his mention of a reciprocal enforcement mechanism that would allow Beijing to unilaterally enforce compliance, has also raised concerns within the United States that it would expose USA firms to retaliation without the ability to seek recourse through a third party such as the World Trade Organization.

For example, foreign companies in China are subject to equity caps and joint venture restrictions that often include hidden costs, such as technology transfer, in the automotive, banking, healthcare services, information and communications technologies, and insurance industries.

One example was foreign legal firms in China can not hire local lawyers to practise Chinese law, while Chinese firms face no such restriction in the US.

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin plan to travel to Beijing in the week of April 29, according to the people, who spoke on condition of anonymity to discuss internal deliberations.

But analysts say it remains unclear how far China will go in meeting US demands for fundamental changes in industrial policy that could weaken the communist party's hold on power.

However, Stratford said the ongoing trade talks were the "most extensive, and the most valiant effort of the two governments to reach agreement that we've seen in at least two decades". The two governments say settlement talks are making progress, but sanctions on billions of dollars of each other's goods are still in place.

"I think the downside of having an agreement that doesn't work is considerable", he said.

Other reports by Click Lancashire

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