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Weak point in China economic system offers Beijing incentive for commerce deal

10 January 2019

The United States says talks on ending a bruising trade war focused on Chinese promises to buy more American goods but gave no indication of progress on Beijing's technology ambitions and other thorny issues.

Uncertainty over the outcome of China-U.S. trade talks cast a pall Thursday over Asian markets as both sides kept mum about what lies ahead. China's Ministry of Commerce said there were "detailed exchanges" and both sides would "maintain close contact", without offering specifics.

The Trump administration wants the government of President Xi Jinping to alter its handling of technology and intellectual property held by foreign companies, and change plans for government-led creation of Chinese leaders in advanced technologies.

U.S. and Chinese officials discussed "ways to achieve fairness, reciprocity and balance in trade relations", the U.S. Trade Representative's office said in a statement.

But they are a key step before both countries' top negotiators - US Trade Representative Robert Lighthizer and Chinese Vice-Premier Liu He - can sit down to thrash out a deal.

President Donald Trump has said on Twitter that the talks are "going very well".

Neither side has said when the two countries will meet again for further negotiations.

The talks were seen as a litmus test of whether a lasting deal can be reached before March 2, when the Trump administration plans to hike tariffs on $200 billion of Chinese goods from 10% to 25%.

The global economy has been suffering from the chilling effect of a trade war between the world's two largest economies.

The Global Times commentary said China's growing economy means it can "carry out a more intense boycott" of trade with the United States if needed.

A combination of lower shipping costs and lower domestic demand will boost USA crude oil exports to Asia, Reuters reports, citing sources from the commodity trading and shipping industries. US government data shows the Asian nation scooped up more than 2.6 million metric tons of beans in December and at least another 1.3 million were sold this year, according to people familiar with the matter.

The oil price jumps were in line with Asian stock markets, which climbed to 3-1/2 week highs on Wednesday.

Among their many requests, US negotiators are asking the Chinese to increase purchases of American farm and energy commodities; allow greater access into China's markets; improve and enforce property theft protections; and an end of China's policy of forcing foreign companies to hand over technology secrets. "That's really good for the cost of money and taking some further headwinds out of the US dollar", he said. The issues at play have soured the wider U.S. The 28-nation trade bloc filed its own challenge in the World Trade Organization in June against Chinese licensing rules it said hamper the ability of foreign companies to protect and profit from their technology.

While the United States government hadn't specified how long the talks would last, China's Commerce Ministry had previously said they would only go on for two days.

In return, the USA will agree to wind down exorbitant tariffs now placed on Chinese imports.

If talks continue to go well, a cabinet-level meeting is likely to happen before the end of the month.

The two delegations were led by U.S. deputy trade representative Jeffrey Gerrish and China's vice-minister of commerce, Wang Shouwen.

U.S. companies also want action on Chinese policies they complain improperly favor local companies.

On Monday, Chinese importers made another large purchase of USA soybeans, their third in the past month.

Weak point in China economic system offers Beijing incentive for commerce deal