Hong Kong Chief Executive Carrie Lam (林鄭月娥) said that she was not “too optimistic” that the US and China can reach a lasting trade deal before their three-month truce expires in March.
Lam said that it became clear to her during recent discussions she held with US officials and businesspeople that fundamental issues beyond the trade deficit still need to be addressed between the two sides.
“I doubt those fundamental problems can be addressed in a short period,” she told Bloomberg Television at the World Economic Forum in Davos, Switzerland, on Tuesday.
The US and China held mid-level trade talks in Beijing earlier this month, but people close to the discussions have said they made little progress on US allegations of state-coordinated Chinese theft of US intellectual property.
The next round of talks is scheduled for Wednesday and Thursday next week, when Chinese Vice Premier Liu He (劉鶴) visits Washington to meet US Trade Representative Robert Lighthizer and US Secretary of the Treasury Steven Mnuchin.
Business groups in Hong Kong are worried US President Donald Trump’s administration would open the door to ending the financial hub’s preferential trade status amid the trade dispute, rendering it “just another Chinese city” as Lam’s government gets closer to Beijing.
Hong Kong has also been forced to defend its free speech protections after a series of Beijing-backed efforts to restrict dissent in the former British colony, which returned to Chinese rule in 1997.
Hong Kong was on track to meet its 3.2 percent economic growth forecast for last year, but reaching 3 percent this year “would be a challenge,” Lam said.
Hong Kong’s financial secretary would make this year’s official forecast next month, she said.
Meanwhile, Trump’s top economic adviser said that the scope of US trade talks with Beijing is broader and deeper than ever before, but a final outcome would ultimately depend on verification of Chinese commitments.
US National Economic Council Director Larry Kudlow said in a Tuesday interview with CNBC that “enforcement is absolutely crucial to the success of these talks.”
“Promises are great, but enforcement is what we want — things like deadlines and timetables, and full coverage of the various structural issues,” he said. “Will this all be solved at the end of the month? I don’t know. I wouldn’t dare to predict.”
He acknowledged “the degree of difficulty” and said that it was up to the president to decide “what he can accept or cannot accept.”
Kudlow denied reports that preparatory trade talks with Chinese officials had been canceled due to a lack of progress.
The Financial Times reported earlier on Tuesday that US officials canceled preparatory talks with Chinese Vice Minister of Commerce Wang Shouwen (王受文) and Vice Minister of Finance Liao Min (廖岷) because of a lack of progress on intellectual-property issues and structural reforms to China’s economy.
If trade talks with China do not produce a deal by March 1, the White House has scheduled an increase in tariffs to 25 percent from 10 percent on US$200 billion of Chinese goods.
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