Source: Global Times    Published: 2019-2-15

Chinese President Xi Jinping met with top US trade officials on Friday, after the latest round of China-US trade negotiations concluded in Beijing, offering support from China's top leadership for the ongoing talks aimed at resolving the trade war between the world's two largest economies.

While the negotiations failed to deliver a final agreement, the two sides have made progress and agreed to hold further discussions, signaling lingering divisions over some issues but eagerness from both sides to end the increasingly costly trade standoff.

Xi met with US Trade Representative Robert Lighthizer and US Secretary of Treasury Steven Mnuchin, who led the US trade delegation to China, at the Great Hall of the People in Beijing Friday afternoon, the Xinhua News Agency reported.

At the meeting, the Chinese president said the two teams have made important progress at the current stage and will continue talks next week in Washington, according to Xinhua.

Xi also told the top US trade negotiators that China is willing to resolve the differences and frictions through cooperation. However, there must be principles for cooperation, he said.

This is the first time the Chinese president met with the US trade delegation since the trade talks began last year, adding fresh momentum to tough negotiations and optimism for a resolution.

While Xi's meeting was a form of diplomatic reciprocation to Trump's meeting with Chinese Vice Premier Liu He at the White House in January, there is also a "more substantive purpose," said He Weiwen, a former Chinese trade official.

"It is to show that our top leadership hopes to push forward consultations and strives for a positive outcome," he told the Global Times.

The White House also released a statement later on Friday said that "These detailed and intensive discussions led to progress between the two parties," and "United States and Chinese officials have agreed that any commitments will be stated in a Memoranda of Understanding between the two countries."

Next week, discussions will continue in Washington at the ministerial and vice-ministerial levels. The US looks forward to these further talks and hopes to see additional progress, the statement said.

At the trade talks in Beijing, the two sides discussed technology transfer, intellectual property rights protection, non-tariff barriers, trade balance, implementation mechanism and other topics of mutual concerns, the Chinese Ministry of Commerce (MOFCOM) said in a statement.

"The two sides reached consensus on principles for major issues and conducted specific consultation over a memorandum of understanding for bilateral trade issues," the MOFCOM statement said.

Bai Ming, deputy director of the International Market Research Institute, said the mention of an MOU is a first and could be the foundation for a final agreement. "This is a great sign. It means the two sides are now focusing on writing down specifics of the final agreement," he told the Global Times.

However, key questions remain as to whether the two sides discussed the March 2 deadline, when US tariffs on $200 billion worth of Chinese goods are scheduled to increase from the current 10 percent to 25 percent.

Also unclear is whether there would be a meeting between the leaders of the two countries, which has become a scenario necessary to avert the trade standoff, analysts said.

"When there are some things that truly cannot be addressed [on the lower levels], the hope is for the top leaders to step in," Huo Jianguo, vice chairman of the China Society for World Trade Organization Studies, told the Global Times.

Huo said the two leaders played a decisive role in starting the talks after they reached a truce in December and will most likely have the final say on a potential agreement.

Growing pragmatism

Despite the lack of specifics on the progress of the latest trade talks, the third round since the truce, analysts said that by further extending the talks, the two sides have already made progress and, more importantly, showed a level of pragmatism.

"It is within expectations that any negotiations could be delayed," He said. "Negotiations as complicated and involving major interests as this would often be delayed."

"The fact that they extended the negotiations is, in itself, progress. It shows that everyone attaches great importance to the outcome," Huo noted, adding that it proves the two sides are actually trying to address the issues, probably not just on trade but other areas as well. "It's good as long as we continue to talk."

Among such issues, the central sticking point could be US demands for China to make structural changes in its industrial policies and its state-owned enterprises, which China has claimed to be its legitimate right for economic development, analysts said.

China has disagreed with US accusations of forced technology transfers and lack of sufficient intellectual property rights protection, which Chinese officials have denied.

"China has its bottom line. We will only accept terms that are applicable on the US side and also conducive to our high-quality economic growth and global economic development," Chen Fengying, a research fellow at the China Institutes of Contemporary International Relations, told the Global Times.

The agreement on further talks also showed that there is pragmatism, particularly on the US side, after the trade war started to weigh on economic growth and stock markets in the US, analysts said.

"The US side was overconfident at the beginning, thinking that China would give in if forced, but China has not bowed its head. Instead, the US is seeing a rising cost," Bai said.

He Weiwen is a senior fellow of Chongyang Institute for Financial Studies at Renmin University of China.