China Open to Talks If US Shows Respect, Names Point Person
China wants to see a number of steps from President Donald Trump’s administration before it will agree to trade talks, including showing more respect by reining in disparaging remarks by members of his cabinet, according to a person familiar with the Chinese government’s thinking.
Other conditions include a more consistent US position and a willingness to address China’s concerns around American sanctions and Taiwan, said the person, who asked not to be identified to discuss internal thinking.
Beijing also wants the US to appoint a point person for talks who has the president’s support and can help prepare a deal that Trump and Chinese leader Xi Jinping can sign when they meet, the person said.
The fate of the global economy and financial markets hinges in large part on whether the US and China can find a way to avoid a protracted trade war. Trump has hit China with tariffs of 145% on most goods since taking office, prompting Beijing to retaliate and threatening to wipe out most trade between the world’s biggest economies.
The offshore yuan gained 0.2% against the dollar in the wake of the report. The Australian dollar, a China-proxy currency, also advanced 0.5%. S&P 500 Index futures pared losses to 0.4% from as much as 1.6% earlier in the session.
The rapid onslaught of US tariffs has engendered broad public support in China for retaliation, giving Xi a political incentive to rebuff Trump’s repeated demands for a phone call. The US leader on Tuesday again called on China to reach out to him in order to kick off negotiations to resolve the trade fight.
According to the person familiar with Beijing’s thinking, the most important precondition for any talks is that Chinese officials need to know such engagement will be conducted with respect.
While the president has been relatively dovish when speaking publicly about Xi, other members of his administration have been more hawkish, leaving officials in Beijing unsure of the US’s position, the person said.
Whatever the situation in Trump’s first term, officials in Beijing believe he now has tremendous control over this administration, said the person. As a result, when US officials make pointed statements about China, and Trump doesn’t disavow those views, Chinese officials have assumed the president condones their positions, the person said.
Source : Bloomberg
