China trade talks extend into evening of second day

Muriel Colon
January 9, 2019

The US guided-missile destroyer McCampbell sailed near the disputed Paracel Islands in the South China Sea as officials of both the countries kicked off their first face-to-face talks here to resolve the trade dispute during which the world's top two economies have imposed import duties on more than United States dollars 300 billion of each other's goods.

US Commerce Secretary Wilbur Ross signalled in a CNBC interview on Monday that there was a "very good chance" of reaching an agreement.

China lodged a "stern" diplomatic protest with the United States on Monday after its guided-missile destroyer sailed near disputed islands in the South China Sea, asserting that America should stop such "provocative" action and create an enabling environment for successful negotiations on the ongoing trade dispute.

After months of US tariffs on Chinese imports and Chinese retaliatory tariffs on USA goods, Trump and Chinese President Xi Jinping held December 1, 2018 meetings at the G20 in Argentina.

The looking to crack down on China's business practices, including allegations of technology theft along with slashing the trade deficit and getting more access to Chinese markets.

Still, talks between the world's two biggest economies have repeatedly yielded no breakthroughs since they started in May, and Beijing has repeatedly said it won't cave to USA demands.

China's Foreign Ministry spokesman Lu Kang later told a daily news briefing results will be released soon.

On Monday, a U.S. Navy Arleigh Burke-class guided-missile destroyer sailed near islands disputed between China, Vietnam, and Taiwan in the South China Sea.

The talks are going ahead despite tensions over the arrest of a Chinese tech executive in Canada on USA charges related to possible violations of trade sanctions against Iran.

After three days of negotiations, talks between the two sides in Beijing have just concluded - and there's real optimism of a breakthrough.

Ministry spokesman Lu said Monday during a routine briefing that Chinese military aircraft and naval vessels were dispatched to identify the USA vessel and warn it to leave the area near disputed islands in the South China Sea.

If the leaders fail to make a deal, Trump has threatened to raise the tariff rate on $200 billion in Chinese goods to 25 percent from 10 percent, and China has vowed to retaliate.

One Chinese official reportedly described the negotiations as "constructive".

Even so, Lu said, "China's development has ample tenacity and huge potential".

Few details have emerged from the trade talks, which are scheduled to run through Tuesday.

For their part, Chinese officials are unhappy with USA curbs on exports of "dual use" technology with possible military applications. Preliminary discussions were "a little more optimistic than usual", White House economic adviser Larry Kudlow told Bloomberg TV Friday.

He is expected to meet chief U.S. Trade Representative Robert Lighthizer later this month.

China and the USA have in the past traded barbs over what Washington says is Beijing's militarisation of the South China Sea, by building military installations on artificial islands and reefs.

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