Fri, Nov 16, 2018 page10

• China mulls trade concessions: sources

  DEAL ON HORIZON? The American Enterprise Institute’s Derek Scissors said the most likely outcome of a Trump-Xi meeting at the G20 summit was a ‘ceasefire’ on tariffs

  • Bloomberg
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  Chinese officials have outlined a series of potential concessions to US President Donald Trump’s administration for the first time since the summer as they try to resolve a trade dispute between the world’s two largest economies, three people familiar with the discussions said.

  The commitments for now fall short of the type of major structural reforms that Trump has been demanding, two of the people said, adding that a long road lies ahead in negotiations.

  One person said that talks were continuing and were constructive.

  As a result, it raised doubts over how substantive a deal Trump could make with Chinese President Xi Jinping (習近平), with the two leaders to meet this month on the sidelines of a G20 summit in Buenos Aires, one of the people said.

  Most of the document appeared to be a rehash of previous changes already made by Beijing, such as raising equity caps on foreign investment in certain industries, one person said.

  It did not contain the sort of commitment to change industrial policies such as Xi’s “Made in China 2025” that Washington has been seeking, one person familiar with the discussions said.

  Two other people familiar with the talks also said the Chinese offer was a sign of what they characterized as constructive discussions between the two sides ahead of the planned meeting between the two leaders.

  A US Department of the Treasury spokesman did not reply to an e-mailed request for comment.

  The Chinese Ministry of Foreign Affiars did not immediately respond to a fax seeking comment.

  US Secretary of the Treasury Steven Mnuchin and Chinese Vice Premier Liu He (劉鶴) — Xi’s top economic adviser — spoke on Friday last week for the first time in months.

  Since then, lower-level discussions have been held and US National Economic Council Director Larry Kudlow on Tuesday said that the two sides were in touch “at all levels.”

  On the US side, the discussions are being led by Mnuchin and the Treasury.

  Mnuchin is seen as an advocate within the administration of a deal, while others, such as US Trade Representative Robert Lighthizer, have been pushing to continue raising pressure on Beijing to try to push for more meaningful reforms.

  “Mnuchin and Kudlow cannot create a trade deal. They are not capable of it,” said Derek Scissors, a China expert at the American Enterprise Institute, who said the two men lacked experience in difficult trade negotiations.

  “Until I see Lighthizer ordered into the fray I don’t think there will be a trade deal,” Scissors said.

  Scissors, who has previously advised the Trump administration on its China trade stance, said in an interview on Wednesday that the most likely outcome of the Trump-Xi meeting at the G20 was a “ceasefire,” or a deal to avoid any further escalation in tariffs while the two sides hold deeper discussions.

  However, the chasm between the two sides on issues such as Chinese industrial policy and intellectual property theft remained vast and any post-G20 negotiations were likely to be difficult, he said.
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