China will strive to reach an initial trade agreement with the United States as both sides keep communication channels open, the Chinese commerce ministry said on Thursday, in an attempt to allay fears talks might be unraveling, ONA reports citing Reuters.
China is willing to work with the United States to resolve each other’s core concerns on the basis of equality and mutual respect, and will try hard to reach a “phase one” deal, Gao Feng, spokesman at the ministry, told reporters.
“This is in line with the interests of both China and the United States, and of the world,” Gao said.
Economists warn that the prolonged trade dispute between China and the United States is escalating risks to the global economy by disrupting supply chains, discouraging investment and dampening business confidence.
Completion of a phase one deal could slide into next year, trade experts and people close to the White House told Reuters previously, as Beijing presses for more extensive tariff rollbacks and the U.S. administration counters with heightened demands of its own.
Global equities retreated on Thursday due to concerns that the ‘phase one’ deal would be delayed. The trade jitters also sent the 10-year U.S. Treasury yield down to near its lowest levels in three weeks. The Chinese yuan also softened against the dollar.
Officials from Beijing had suggested that Chinese President Xi Jinping and U.S. counterpart Donald Trump might sign a deal in early December.
Some experts said the next date to watch was Dec. 15, when U.S. tariffs on about $156 billion in Chinese goods are set to take effect, including holiday gift items such as electronics and Christmas decorations.
In a dinner speech in Beijing on Wednesday, Chinese Vice Premier Liu He said he was “cautiously optimistic” on a phase one deal, Bloomberg News said, citing people who attended the event ahead of a forum organized by Bloomberg LP.
Liu, China’s chief negotiator at the trade talks, separately told one of the attendees that he was “confused” about the U.S. demands, but was confident the first phase of a deal could be completed nevertheless, Bloomberg added.
Gao, when asked about sticking points and whether they were related to Washington’s demand for China to buy more U.S. farm goods and the tariff rollbacks, said he did not have more information to disclose beyond the fact that both parties would continue to communicate, and “outside rumors are not accurate.”
A former Chinese commerce minister told Reuters that both sides should return to the time when the trade war first started.
“We should return to the point of origin and cancel all tariffs,” Wei Jianguo said on the sidelines of the Bloomberg forum.
Wei said he was hopeful for a phase one pact, in light of the pressure on both the U.S. and Chinese economies as the trade war dragged on.
“Now, Trump himself is cognizant about the needs of the (upcoming U.S.) elections, and the U.S. economy has also suffered great losses,” he said.
“Under such circumstances, it is entirely possible to reach a phased agreement.”