China's Xi says he wants to work out initial trade deal with U.S.
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[November 22, 2019]
By Yawen Chen and Ryan Woo
BEIJING (Reuters) - China wants to work out
an initial trade pact with the United States and has been trying to
avoid a trade war, President Xi Jinping said on Friday, but is not
afraid to retaliate when necessary.
Economists warn that a prolonged dispute between the world's two largest
economies is elevating risks to the global economy by disrupting supply
chains, curtailing investment and curbing business confidence.
"We want to work for a 'phase one' agreement on the basis of mutual
respect and equality," Xi told representatives of an international
forum, according to a pool report.
"When necessary we will fight back, but we have been working actively to
try not to have a trade war. We did not initiate this trade war and this
is not something we want."
Xi was responding to questions from representatives of the New Economy
Forum organized by Bloomberg LP at the Great Hall of the People in
Beijing.
Global financial markets retreated this week on fresh fears that the
trade talks could flounder, with U.S. President Donald Trump expected to
sign into law two bills backing protesters in the Chinese-ruled city of
Hong Kong.
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Concerns of a broader deterioration in Sino-U.S. ties weighed on markets
this week. U.S. Navy warships twice sailed near islands claimed by China
in the South China Sea in recent days, angering Beijing.
Completion of a phase one trade deal could slide into next year, trade
experts and people close to the White House have told Reuters, with
Beijing asking for more extensive tariff rollbacks and Washington
countering with increased demands of its own.
Delays would only bring more trouble, said Fred Hu, founder of
China-based global investment firm Primavera Capital Group.
"The longer the time it takes, the more variables are there, such as the
Hong Kong issue," Hu told Reuters on the sidelines of the Bloomberg
forum.
Beijing and Washington should strengthen communication on strategic
issues, the official Xinhua news agency cited Xi as saying on Friday.
"Sino-U.S. relations are at a pivotal moment amid various difficulties
and challenges," Xi said during a meeting with former U.S. Secretary of
State Henry Kissinger in Beijing.
"Both the United States and China should strengthen their communication
over strategic issues and avoid misunderstanding and misjudgment."
MORE TRADE TALKS?
China has invited top U.S. trade negotiators for a new round of
face-to-face talks in Beijing, the Wall Street Journal said, citing
unidentified sources. It added that Beijing hoped the talks could take
place before next Thursday's U.S. Thanksgiving holiday.
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![](../images/112219PIX/news_s13.jpg)
China's President Xi Jinping looks on during a joint statement with
Brazil's President Jair Bolsonaro after a bilateral meeting during
the BRICS summit in Brasilia, Brazil November 13, 2019. REUTERS/Ueslei
Marcelino
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U.S. officials have indicated willingness to meet but have not
committed to a date, it added, and they would be reluctant to travel
for the discussions unless China made clear that it would make
commitments on intellectual property protection, forced technology
transfers and agricultural purchases.
"My assumption is some tariff relief would be provided, in exchange
for a phase one deal. And it seems to me as well that is the only
basis on which any deal could actually be done, certainly from the
point of view from the Chinese side," said former U.S. Trade
Representative Charlene Barshefsky.
"Otherwise, this is an entirely one-sided exercise, and I've never
known the Chinese to negotiate one-sided deals to their
disadvantage," she said at a group interview on the sidelines of the
Bloomberg forum.
Officials from Beijing had suggested Xi and his 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.
"As we always said, we don't want to start the trade war, but we are
not afraid," Xi said.
In Beijing on Wednesday, Vice Premier Liu He, China's chief
negotiator in the trade talks, said he was cautiously optimistic on
a phase one deal, Bloomberg News said, citing people who attended a
dinner event ahead of the forum.
"The two countries should really ink the deal the sooner the better,
at least a truce, and that will inject some certainty into the
market and the economy," Hu said.
"Based on this, we can clear out a consensus on complicated
structural problems, and strive for a comprehensive final
agreement."
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(Reporting by Ryan Woo, Cheng Leng and Yawen Chen; Editing by Paul
Tait, Clarence Fernandez & Simon Cameron-Moore)
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