US and China Could Hold Trade Talks in Early January

Farmer Lucas Richard of LFR Grain harvests a crop of soybeans at a farm in Hickory, North Carolina, on Nov. 29, 2018. (Charles Mostoller/Reuters)

BEIJING—China and the United States have made plans for face-to-face consultations over trade in January, the Chinese commerce ministry said on Dec. 27, as the world’s two biggest economies advanced efforts to resolve a months-long trade war.

Consultations through “intensive” telephone calls will continue in the meantime, Gao Feng, spokesman at China’s commerce ministry, told reporters, adding that talks have been steadily moving forward despite the Christmas break in the United States.

“Even as the U.S. side is in the Christmas holiday period, China and U.S. economic and trade teams have been in close communication, and the consultations are progressing in an orderly manner as scheduled,” Gao said, when asked about progress on negotiations.

Gao did not comment directly when asked to confirm a media report on a U.S. trade delegation visit scheduled for the week of Jan. 7. 

Bloomberg, citing two people familiar with the matter, reported on Dec. 26 that a U.S. trade team will travel to Beijing the week of Jan. 7 for talks. Additionally, the U.S. delegation will be led by Deputy U.S. Trade Representative Jeffrey Gerrish and will include David Malpass, Treasury undersecretary for international affairs. 

“The two sides have indeed made specific arrangements for face-to-face consultations in January in addition to continuing intensive telephone consultations,” he said, without elaborating.

U.S. and Chinese officials have spoken by phone in recent weeks, but a meeting next month would be the first in-person talks since U.S. President Donald Trump met his Chinese counterpart, Xi Jinping, in Buenos Aires on Dec. 1, when the two leaders agreed to stop escalating tit-for-tat tariffs. 

The leaders also agreed to launch new talks while the United States delayed a planned Jan. 1 tariff increase until March.

In response, China has resumed purchases of U.S. soybeans for the first time in six months, even though hefty tariffs on U.S. cargoes remain in place.

Tariff Suspensions 

China has also said it will suspend additional tariffs on U.S.-made vehicles and auto parts for three months starting on Jan. 1, adding that it hopes both sides can speed up negotiations to remove all additional tariffs on each other’s goods.

In yet another reconciliatory sign, China issued on Dec. 25 a so-called negative list that specifies industries where investors—domestic or foreign—are either restricted or prohibited.

The unified list is seen as another effort to address concerns among Western investors that there is no level-playing field in China. Investment in key Chinese sectors, however, is still prohibited.

China Relents

Amid mounting criticism, reduced foreign investments, and trade war pressure from the United States, China has recently made some concessions to U.S. demands by promising to open its domestic markets further to foreign investors and better protect their rights.

The commerce ministry is working on improving market access to foreign investors in the telecommunications, education, medical, and culture sectors, Gao said, when asked about areas that could see curbs eased.

In particular, the equity cap on foreign investment in the education and medical sectors would be relaxed, he said, without giving a timeline.

On Dec. 26, China unveiled the draft of a foreign investment law containing a proposed ban on forced technology transfer and government “interference” in foreign business operations, practices that have come under the spotlight during the trade war. However, experts were not optimistic that the regulations would effectively stop Chinese joint-ventures from pressuring foreign firms to transfer technology.

The draft will likely go through several readings before being submitted to China’s rubber-stamp legislature for formal approval, which could take another year or more.

Heaping some uncertainty in the way of the trade talks was the recent arrest of the chief financial officer of Huawei in Canada at the request of the United States.

U.S. prosecutors accuse Meng Wanzhou of misleading multinational banks about Iran-linked transactions, in violation of U.S. sanctions. 

By Yawen Chen and Ryan Woo.