Source: SCMP    Published: 2019-6-19

When Chinese President Xi Jinping meets his US counterpart Donald Trump in Japan at the end of the month they are expected to discuss a broad range of issues, including the trade war, in an effort to stop the relationship from tilting towards sustained confrontation, analysts said.

Neither side has provided an agenda for the meeting on the sidelines of the G20 leaders summit in Osaka, despite confirmation coming from both sides that it was to take place, after weeks of speculation.

A summary of Tuesday’s phone conversation between Xi and Trump published by Xinhua, however, implied that the leaders would cover more strategic issues, leaving the nuts and bolts of a trade deal to their negotiating teams.

Meanwhile, China’s foreign ministry spokesperson Lu Kang said at a regular press conference on Wednesday that the two leaders would discuss the overall direction of bilateral relations, but he did not elaborate further.

Wei Jianguo, a former vice-minister at China’s Ministry of Commerce, predicted that Beijing would use the meeting to make clear a few principles regarding the bilateral relationship.

“It’s inevitable [for China and the US] to have problems in certain fields, but both sides should resolve the problems through dialogue on an equal footing rather than opting for a trade war, a tech war, or a financial war,” said Wei, now a vice-chair at the state-backed China Centre for International Economic Exchanges, a think tank.

He added that China would try to convince the US that it had no intention of challenging its global hegemony, but that China’s own “core interests”, including its sovereignty, territorial rights and room to develop, “must be respected”.

A government official in Beijing, who declined to be identified, said China was pinning its hopes on the leaders’ summit to ease general tensions between Beijing and Washington, even though the chances of the leaders reaching any concrete agreements in Osaka was small.

“Without a leaders’ summit, it would be difficult to push ahead the work [to reach agreements] at the ministerial or lower levels,” the source said.

The last summit between Trump and Xi in Buenos Aires in December resulted in a tariff truce and negotiations that continued until early-May. But the talks failed to achieve a deal to end the conflict, resulting in the US more than doubling tariffs on US$200 billion of Chinese imports and threatening tariffs on almost all remaining Chinese imports, valued at US$300 billion by the US government.

Tuesday’s telephone call, in which Xi told Trump he was willing to exchange views with Trump on “the fundamental issues” affecting China-US relations, came at a low point in recent China-US relations.

The tariff increase followed the collapse of trade talks in early-May, while hostile rhetoric has spread into the political and military spheres. The US labelled China a “strategic competitor” and accused Beijing of conducting sustained espionage to impede US’s national security, while China blamed the US for trying to thwart China’s development by targeting Huawei and infringing on China’s sovereignty over Taiwan and Hong Kong.

Zhou Rong, a senior fellow from the Chongyang Institute for Financial Studies at the Renmin University of China, said the two leaders have a long list of issues to talk about this time in addition to trade, including Taiwan, the South China Sea, as well as the treatment of Chinese companies in the US. China can offer to help on some issues but “the US should not force China to swallow bitter fruit it cannot digest”, Zhou said.

Ni Feng, a specialist in Sino-US relations at the Chinese Academy of Social Sciences, said they would discuss the “overall direction” of their bilateral relationship, including where the two nations could engage in “competition and cooperation”.

He added that North Korea may be on the agenda because “China and the US share the same goal of the denuclearisation of the Korean peninsula.” Xi is set to start a two-day state visit to Pyongyang on Thursday.

Zhou Rong, a senior fellow from the Chongyang Institute for Financial Studies at the Renmin University of China.