BEIJING (REUTERS, BLOOMBERG) – China’s commerce ministry said that a phone call on Thursday (Sept 5) with US top trade negotiators went very well, adding that Beijing opposes any escalation in the trade war.
Both sides will strive to achieve real progress during a high-level meeting scheduled for early October, ministry spokesman Gao Feng told reporters in a weekly briefing.
China and the United States agreed to hold high-level trade talks in Washington, the ministry said earlier on Thursday, following a phone call between China’s Vice-Premier Liu He and US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin.
Commerce Minister Zhong Shan, People’s Bank of China Governor Yi Gang and deputy head of the economic planning commission Ning Jizhe were also on the call.
The call came amid fears that an escalating trade war could trigger a global economic recession.
“Both sides agreed that they should work together and take practical actions to create good conditions for consultations,” the ministry said.
Trade teams from the two countries will hold talks in mid-September before the high-level talks next month, the ministry said. Both sides agreed to take actions to create favourable conditions, it said.
A spokesman for the US Trade Representative’s office confirmed that Mr Lighthizer and Mr Mnuchin spoke with Mr Liu and said they agreed to hold ministerial-level trade talks in Washington “in the coming weeks”.
Washington began imposing 15 per cent tariffs on an array of Chinese imports on Sunday, while China began placing new duties on US crude oil. That prompted China to lodge a complaint against the United States at the World Trade Organisation.
The United States plans to increase the tariff rate to 30 per cent from the 25 per cent duty already in place on US$250 billion (S$346 billion) worth of Chinese imports from Oct 1.
US President Donald Trump warned on Tuesday that he would be tougher on Beijing in a second term if trade talks dragged on, compounding market fears that ongoing trade disputes between the United States and China could trigger a US recession.
Chinese leaders will have a packed schedule next month, gearing up for National Day celebrations scheduled for Oct 1.
They will also hold a key meeting in October to discuss improving governance and “perfecting” the country’s socialist system, state media has said, more than a year after the last was held.
“Neither China nor the US want to be blamed by the rest of world for escalating the trade war and damaging the world economy,” said Mr Zhou Xiaoming, a former Chinese commerce ministry official and diplomat.
“But the talks don’t mean the two sides will inch closer or that their stances soften,” he added.
Some within the Trump administration are sceptical that China is willing to make the sort of broad commitment to reforms sought by the US that caused a breakdown in talks in May, according to people familiar with the officials’ thinking.
Others have become increasingly focused on trying to calm financial markets and forestall any further economic fallout in the US where Mr rump’s tariffs and the uncertainty surrounding the trade war are being blamed for a slowdown in manufacturing.
It is unclear if the two sides will go back to a May draft agreement as the United States has been seeking.
“No one is holding their breath” with regard to the talks, said Mr Chua Hak Bin, an economist at Maybank Kim Eng Research in Singapore. “Investors are slowly coming to terms that a trade deal is increasingly remote, with both sides talking tough and preparing for a long battle.”