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Home / Business / China US trade tensions

Trade prospects positive as agreement takes shape

By Jing Shuiyu and Zhong Nan in Beijing and Zhao Huanxin in Washington | China Daily | Updated: 2019-02-27 00:34
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Vice Premier of the People's Republic of China Liu He (top C) listens to US Trade Representative Robert Lighthizer (bottom C) as they participate in a US-China trade talk meeting in the Indian Treaty Room of the Eisenhower Executive Office Building in Washington, DC, USA, 21 January 2019. [Photo/IC]

Analysts say settlement expected soon as Beijing and Washington reportedly discuss the wording of deal, make headway on multiple issues

China and the United States are expected to secure a settlement soon over trade frictions, analysts said, as the negotiating teams are reportedly discussing the wording of an agreement and considering applying the brakes to their tariff standoff.

The analysts made the prediction after Chinese and US officials said there had been concrete progress on multiple issues in the latest round of trade talks in Washington.

During the latest talks, held from Thursday to Sunday in Washington, the seventh round since February last year, the two sides focused on the text of an agreement, the Chinese delegation said, according to a Xinhua News Agency report.

The negotiators also had achieved substantial progress on such specific issues as technology transfers, protection of intellectual property rights, nontariff barriers, the service industry, agriculture and exchange rates, the delegation said.

On the basis of the latest progress, the two sides are expected to continue their work into the next stage, in accordance with the instructions of the two countries' top leaders, according to Xinhua.

State Councilor Wang Yi said Sino-US trade negotiations have once again achieved concrete progress and provided positive prospects for bilateral relations and the global economy. Wang, also the minister of foreign affairs, made the remark at an event on Monday, according to a statement issued by the ministry.

Yao Yang, dean of the National School of Development at Peking University, said, "It is encouraging that both sides have begun to work on the text of an agreement, which indicates a speeding up toward sealing a trade deal.

"The progress also showed that effective economic diplomatic measures can help resolve cumbersome issues and reduce confrontation between two nations," Yao said.

After tit-for-tat exchanges of hefty import tariffs, President Xi Jinping and US President Donald Trump agreed in December to halt new tariffs for 90 days to allow for talks. Since then, negotiations have been conducted on a wide array of topics.

Early on Sunday afternoon in Washington, Trump tweeted that he "will be delaying" the increase of tariffs on Chinese imports scheduled for March 1, due to "very productive" trade talks between the two countries.

Chen Bin, executive vice-president of the China Machinery Industry Federation, said the organization's member companies are optimistic because the extension of the March 1 tariff deadline should help Chinese and US companies restore their ability to trade, while pacifying Chinese companies that have already invested heavily in machinery manufacturing in the US.

"It is increasingly evident that tariffs have caused negative impacts - such as rising unemployment and slowing growth rates - not only for China and the US, but also for many parts of the world," said Xue Rongjiu, deputy director of the Beijing-based China Society for WTO Studies.

The proposed tariff delay indicates economic rationality is prevailing and both countries are expected to reach an agreement soon, Xue added.

Asa Hutchinson, governor of the US state of Arkansas, applauded both presidents for working hard to narrow the differences and reach more consensuses. "I am optimistic we will be able to reach an agreement because it is important for both countries," he said.

Yang Delong, chief economist at Shenzhen-based First Seafront Fund, said that with the seventh round of high-level bilateral trade talks between China and the US, there are signs that a framework agreement will be signed between the two countries in the near future. Given that trade friction exerted the most significant impact on the A-share market last year, such concerns are expected to be gradually removed this year, which helped to boost the market performance on Monday.

China's A-share market is showing more bullish signs, with the benchmark indexes in Shanghai and Shenzhen surging by more than 5 percent on Monday and trading volume hitting a 39-month record high.

The Shanghai Composite Index gained 5.6 percent to close at 2,961.28 points on Monday, which is the highest in eight months. The Shenzhen Component Index surged by 5.59 percent to close at 9,134.58 points. China's Nasdaq-like ChiNext Index increased 5.5 percent to close at 1,536.37 points, reaching a sevenmonth high.

The total trading volume in Shanghai and Shenzhen reached over 1.04 trillion yuan ($155 billion), which is the highest since the end of 2015, according to Shanghai-based market tracker Wind Info.

Meanwhile, the central government's latest deployment in the financial market has helped to buoy sectors such as securities companies and banks, said Zhang Qiyao, analyst at Guosheng Securities.

Xi Jinping, general secretary of the Communist Party of China Central Committee, underscored at a study session on Friday that China should deepen supply-side structural reform in the financial sector and strengthen the sector's ability to serve the real economy.

Analysts from Huatai Securities wrote in a note on Monday that financial supply-side reform will be a key theme for investors this year.

Cai Chunying in Washington and Shi Jing in Shanghai contributed to this story.

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