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07 October 2019
ECONOMY

China narrows scope for trade deal with US ahead of talks

In meetings with US visitors to Beijing in recent weeks, senior Chinese officials have indicated the range of topics they’re willing to discuss has narrowed considerably.

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Chinese officials are signalling they’re increasingly reluctant to agree to a broad trade deal pursued by President Donald Trump, ahead of negotiations this week that have raised hopes of a potential truce, reported Bloomberg.

Vice Premier Liu He, who will lead the Chinese contingent in high-level talks that begin this week told visiting dignitaries he would bring an offer to Washington that will not include commitments on reforming Chinese industrial policy or the government subsidies that have been the target of longstanding US complaints.

That offer would take one of the Trump administration’s core demands off the table. It’s emblematic of what analysts see as China’s strengthening hand as the Trump administration faces an impeachment crisis—which has recently drawn in China—and a slowing economy blamed by businesses on the disruption caused by the president’s trade wars.

Hopes have always been limited that China would agree to give up its economic model in a trade deal with the US. A draft agreement reached in April 2019 before talks broke down included few substantive commitments from China to abandon the sort of industrial policies the Trump administration and others before it have complained about.

That draft focused on securing more transparency from China on the extent of its subsidies. It included a commitment essentially to disavow Made in China 2025, Xi Jinping’s plan for Chinese domination of key 21st-century industry such as artificial intelligence, robotics and electric vehicles, though it lacked a schedule for removing Chinese government subsidies that fuel the plan.

One reason for that is US Trade Representative Robert Lighthizer’s focus on what he views as pragmatic demands for Chinese change, rather than shriller calls for a wholesale abandonment of Beijing’s industrial policy some hawks believe should be required of Beijing.


RELATED STORIES: US-CHINA TRADE TENSION PRESIDENT XI JINPING US PRESIDENT DONALD TRUMP MADE IN CHINA 2025 US TRADE REPRESENTATIVES

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