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Markets buoyed as US-China trade talks extended amid signs of progress

09 January 2019

A statement from the USA side would likely follow the culmination of talks on Wednesday, Emily Davis, deputy assistant USTR for public and media affairs, said in an emailed statement.

Still, talks between the world's two biggest economies have repeatedly yielded no breakthroughs since they started in May, and Beijing has repeatedly said it won't cave to US demands.

"We're looking at commentary from the Fed suggesting they're going to be flexible around rate hikes, there's positive commentary on the USA trade war", said Christopher Anselmo, director at Nasdaq IR Intelligence.

In a sign the meeting was off to a good start, China's economic czar, Vice Premier Liu He, dropped by the talks on Monday to encourage the negotiators.

This time around, though, the U.S. has sent members of the Office of the U.S. Trade Representative, including Deputy Jeffrey Gerrish, USTR Chief Agricultural Negotiator Gregg Doud, and Ted McKinney, the Under Secretary for Trade and Foreign Agricultural Affairs at the U.S. Department of Agriculture.

USA officials worry that China's rise as a potential competitor in telecoms, solar power, electric cars and other fields might erode American industrial leadership.

Some analysts say that China - Pyongyang's key diplomatic ally and main source of trade - could use Mr Kim's visit as a bargaining chip in the United States trade talks.

This week's meetings are the first face-to-face talks since Trump and Chinese president Xi Jinping agreed in December to a 90-day truce in a trade war that has roiled global financial markets.

He publicly said he's eager to make a deal that benefits both sides while also stressing that China's slowing economy and falling stock market signal the country is more desperate than the USA for a speedy outcome. The Trump administration also objects to Chinese industry development plans that Washington, Europe, Japan and other trading partners say violate Beijing's market-opening obligations.

On Monday, U.S. Commerce Secretary Wilbur Ross predicted that Beijing and Washington could reach a trade deal that "we can live with". The move prompted China to increase tariffs on Dollars 110 billion of United States goods.

The Trump administration's calculus regarding how much to stress either increased purchases of USA goods, on the one hand, or structural reforms reflects a divide within the White House.

Trump has imposed 25 percent tariffs on $50 billion of Chinese good and 10 percent duties on $200 billion of imports.

They are different to the Spratley Islands - a series of artificial islands constructed by the Chinese and which have been fitted with military bases and airfields. They have tried to defuse pressure for more sweeping change by offering trade concessions including purchasing more American soybeans, natural gas and other exports.

A private-sector source familiar with the talks said this could indicate that more detailed discussions were likely taking place.

The timing of Monday's foray by the U.S. naval ship coincided with the commencement of trade talks between the two countries.

The talks are occurring as Chinese growth - 6.5 percent in the July-to-September period - fell to its lowest point in a decade. There are concerns that USA growth, 3.4 percent in the third quarter, is also slowing even as the country's unemployment rate remains almost at a five-decade low. "The US is very clear about China's stance". There is no question that the Chinese want the deal, they need the deal.

Markets buoyed as US-China trade talks extended amid signs of progress