US and Chinese officials have met in Beijing for two-days of high-level talks aimed at resolving their ongoing trade dispute.

Tensions between the world's two largest economies escalated last year after the Trump administration announced tariffs on $250 billion worth of Chinese goods. Beijing countered with its own import hikes, putting global stock markets on edge.

In early December Donald Trump and Chinese President Xi Jinping agreed a temporary ceasefire, postponing the next round of tariffs and giving both sides until 1 March to reach an agreement on trade and issues such as the forced transfer of technology.

“Many increasingly see the trade war as a battle for global leadership between the world's two largest economies,” says the BBC. “The stakes are high. Failure to achieve a deal could see both countries resume taxing one another's goods.”

Ahead of the talks, China’s foreign ministry said both sides had expressed a will to work in order to implement the consensus of their respective presidents.

According to a report by Bloomberg, the talks are being conducted in different groups on the areas of non-tariff measures, intellectual property, agriculture and industrial purchases.

NPR’s Matthew Schwartz says the US is seeking concessions in Chinese business practices; in exchange it will eliminate tariffs recently imposed on Chinese goods.

“Top administration officials are confident they have enough leverage to win significant changes,” NPR's Shanghai correspondent Rob Schmitz reports, “including an end to China's practice of forcing US companies to hand over key technology in return for gaining access to China's market, and an agreement to buy more products from the US.”

The Washington Post says there is “mounting optimism that they will find a way to finally break the impasse in their rancorous nine-month-long dispute”.

Hopes were further raised when China’s economic tsar, Vice Premier Liu He, unexpectedly dropped by the talks to spur on the negotiators.

The South China Morning Post says “Liu’s attendance at the talks showed goodwill and Beijing’s commitment to reaching a deal with Washington”.

“With China’s economy facing downward pressure, especially as it braces for the trade war impact, the Chinese side has had more incentives – and some of the US demands are also in line with Beijing’s own needs for economic reform,” said Shi Yinhong, director of the Centre on American Studies at Renmin University of China.

Most economists expect China’s growth rate to fall to around 6% this year, which would be its lowest since 1900.

While the US appears to hold the upper hand, “much has changed since Trump and Xi met on the sidelines of the Group of 20 meeting in Argentina last month”, says the Washington Post.

“It’s an interesting scenario now,” said Ben Cavender, an analyst at China Market Research Group in Shanghai. “Trump would probably like something he can point to as a win, even if it’s not substantive, amid the wall and government shutdown chaos.”

Source: The Week
 

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