China reportedly looking to narrow scope of trade negotiations with US to break deadlock

Author: Justin Low | Category: News

China is said to be looking to exclude national security issues from trade talks

The report comes from the WSJ and says that China is looking to narrow the scope of its negotiations with the US to only trade matters with officials hoping that such an approach would help both sides resolve more immediate issues and break the current impasse.

It is said that China's tactical shift comes after Trump pushed back tariffs on Chinese imports by two weeks overnight, with Beijing looking to show its own gesture of goodwill as well:

"In preparation for a new round of talks scheduled to take place in Washington early next month, Chinese negotiators are making plans to boost purchases of U.S. agricultural products, giving American companies greater access to China's market and bolstering intellectual-property protections, these people said."
Adding that China is looking to adopt a two-track approach to negotiations with trade talks being led by Liu He and US counterpart Lighthizer while a separate team would be assigned to manage other geopolitical matters.

The full report can be found here (may be gated).

I don't think this is much of a coincidence that we're seeing such a proposal come from China following John Bolton's departure from the White House. As mentioned yesterday, a lot of the pressure on Huawei stems from his doing and it looks like China is seeking to take advantage of the current situation.

Essentially, it also benefits Trump ahead of his election bid next year if they can work towards a trade-only deal (which doesn't include firm commitments on the yuan, IP protection or restrictions to Chinese companies).

I reckon this will be the Chinese proposal in October and if this gets shot down, it will be another major setback for trade relations between the two countries.

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