Chinese vice-premier Liu He, Xi Jinping’s close ally and top economic adviser, will meet a high-level US trade delegation this week to discuss a worsening trade conflict between the world’s two largest economies.
Donald Trump has threatened tariffs on up to $150 billion (€125 billion) worth of products imported from China to punish China for long-standing complaints about intellectual property theft, forced technology transfer and various trade barriers which work against US interests.
China, which denies it coerces such technology transfers, has responded with the threat of tariffs on US imports including soybeans, aircraft, cars, whiskey and chemicals.
The prospect of a tit-for-tat trade war having repercussions on the global economy has got many countries worried.
China’s commerce ministry has welcomed the visit by the top-level team, saying it would allow for an “exchange of views” but did not give any more details.
The US delegation includes trade representative Robert Lighthizer, treasury secretary Steven Mnuchin, commerce secretary Wilbur Ross, White House trade and manufacturing adviser Peter Navarro, new White House economic adviser Larry Kudlow and Everett Eissenstat, deputy assistant to the US president for international economic affairs.
Lighthizer said this week he was not looking to negotiate changes to China’s state-driven economic system in the talks, but would seek to expose it to more foreign competition.
China’s official line is that it is in the process of opening its economy further to the outside world, and has criticised Trump’s protectionist approach.
Meanwhile, Chinese media have taken a firm line. The Global Times newspaper, which is not a direct reflection of government opinion but a useful bellwether, said it seemed Washington was "urgently and seriously wanting to resolve trade issues through talks".
“Washington had better not expect that its trade-war stick will force Beijing to take whatever the US delegation offers. The imminent dialogue must be held on an equal footing and the US delegation has to come with sincerity,” it said.
“The composition of the US delegation indicates the importance Washington attaches to China-US trade. We hope this can also be shown in how flexible the delegation will be in negotiations. China won’t abandon its principles despite pressure,” it said.
In the run-up to the talks, China has weakened its daily currency fixing by more than traders and analysts had forecast.
A survey by the US-China Business Council this week showed that exports from the US to China grew faster than US export growth to the rest of the world.
The US exported nearly $128 billion (€107 billion) worth of goods to China in 2017, more than ever before and making China the third-largest US goods export market, trailing Canada and Mexico, according to the USCBC’s 2018 annual report on state exports. US goods exports to China declined slightly in 2015 and 2016.