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China Says Trade Talks are Making Progress

Undersecretary for International Affairs David Malpass of the U.S. Department of the Treasury and other members of the U.S. trade delegation to China, return from talks to a hotel in Beijing, China, January 7, 2019.

China’s Commerce Ministry says that the United States and Beijing made progress in discussions about structural issues such as forced technology transfers and intellectual property rights during trade talks this week. But the lack of details from both sides following the meetings highlights the uncertainty that remains, analysts say.

The talks, which were originally scheduled to wrap up on Tuesday stretched to the evening and into Wednesday.

U.S. officials have said the talks are going well, a point Commerce Ministry spokesman Gao Feng echoed on Thursday at a regular briefing.

FILE - Chinese Ministry of Commerce spokesman Gao Feng gestures as journalists raise hands for questions during a press conference at the Ministry of Commerce in Beijing, April 6, 2018.
FILE - Chinese Ministry of Commerce spokesman Gao Feng gestures as journalists raise hands for questions during a press conference at the Ministry of Commerce in Beijing, April 6, 2018.

“The length of the meetings shows that both sides were serious and sincere about the talks,” he said. “Structural issues were an important part of this round of talks and there has been progress in these areas.”

Gao did not comment, however, on whether he was confident that the talks could be wrapped up in the 90-day period laid out by President Donald Trump and China’s Xi Jinping.

Also, he did not say when the next round of talks might be held or who might attend, only that discussions between the two sides continue.

In early December, Washington and Beijing agreed to hold off on raising tariffs and to try and reach a deal before the beginning of March. Structural issues and concerns about barriers to investment in China are seen as some of the biggest obstacles to the deal.

On Wednesday, White House spokeswoman Sarah Sanders told the U.S cable news Fox Business Network that the administration is expecting something to come out of the talks.

"We are moving towards a more balanced and reciprocal trade agreement with China," she said, adding that no one knows yet what that agreement will look like or when it will be ready.

The U.S. Trade Representative's office gave only a few details about the talks in Beijing, noting in a statement that the discussions "focused on China's pledge to purchase a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States."

At the briefing, Gao did not provide any details about what further purchases China might make.

Darson Chiu, an economist and research fellow at the Taiwan Institute of Economic Research, said the pledges China made looked similar to those it had offered earlier last year. He said it was hard to be optimistic about this first round of talks.

“It looks like short-term compromises have been made, but it remains to be seen if both superpowers are able to resolve their [structural] conflicts,” Chiu said.

He said that if more compromises are made when Chinese Vice Premier Liu He meets U.S. Trade Representative Robert Lighthizer, an official who is viewed as being more hawkish on trade with China, the crisis will only be halfway averted.

“I don’t think the U.S. will easily remove tariffs that have been imposed on Chinese goods. This is what China has wished for, but I think the U.S. will wait and see,” Chiu said.

Issues such as intellectual property enforcement are very difficult and complex, notes Xu Chenggang, a professor of economics at Cheung Kong Graduate School of Business. China can say it will do more, but it already has laws for intellectual property protection.

“Really here the key is the reality,” Xu said. “It’s the enforcement of the law and the enforcement of the law is an institutional issue,” which depends on the independence of China’s judiciary system.

Washington has given Beijing a long list of changes that it would like to see from intellectual property rights protection enforcement to industrial subsidies and other non-tariff barriers.

The United States has said that any deal with China must be followed up with ongoing verification and enforcement.

If the two sides are unable to reach a deal by March, President Trump has threatened to raise tariffs on $200 billion in Chinese goods to 25 percent and to possibly levy additional tariffs that would extend to all imports from China.

Joyce Huang contributed to this report.