United States and China Meeting to Avoid Trade War

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The list also includes a demand that China end some of its policies related to technology transfers, a key source of tension underlying the dispute. Beijing is using the dividends from unchallenged mercantilism to finance instruments of soft power - foreign aid and state directed overseas investment - and build an impressive navy to subvert USA security arrangements in the Pacific. "The commercial and economic relationship is really the ballast in the relationship", Max Baucus, former USA ambassador to China, told China Daily at the annual conference of the Committee of 100 in Santa Clara, California.

American analysts were struck by the aggressiveness of the Trump team's demands.

"The meetings this week are unlikely to lead to more than a very temporary cessation of hostilities", said Eswar Prasad, a China expert at Cornell University.

"We will be meeting tomorrow to determine the results, but it is hard for China in that they have become very spoiled with USA trade wins!" This is very unusual and a bad sign for things to come because it means that the USA and China are so far apart on issues that they can't even agree on a basic statement for public relations purposes. Germany says it is ready and eager to do that to guarantee the stability and predictability of the EU's trade relations with the U.S.

Other members of the delegation included Secretary of Commerce Wilbur Ross, US Trade Representative Robert Lighthizer, Assistant to the President for Economic Policy Larry Kudlow, and Assistant to the President for Trade and Manufacturing Policy Peter Navarro. While China hasn't indicated any detail on what it may be prepared to agree to, a senior official sounded a defiant tone ahead of the meeting, and the state news agency warned against "unreasonable demands". "We have a lot of common interests, and like any two big economic entities, there are times when there will be tensions", he said.

The presentation of that list solved one long-standing mystery heading into the talks: What, precisely, an internally-divided American team is demanding of the Chinese.

"China won't be frightened by this kind of threat", wrote Hu Xijin, the chief editor of the Global Times, a nationalistic tabloid affiliated with the Communist Party mouthpiece, in a post on the Sina Weibo website.

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Chinese commentators say Beijing has financial weapons, though using them would cost China's own economy and worldwide standing. It has been suggested that the iPhone 7 alone may account for 4.4% of the USA trade deficit with China. Some groups had complained the administration was sending mixed messages. Mr. Parker further said, "We'd like to see the Trump administration clearly articulate what it wants China to do". -China Business Council. The list submitted to China helps "lead to a solution and avoid tariffs and other sanctions", he said.

"Both sides realized that there are still relatively big differences over some issues and that they need to continue to work hard to make more improvements", the report said.

Nationalists point to China's $1.2 trillion holdings of USA government debt as leverage. Import from the US alone increased almost five times.

The dispute will be tough to resolve because the fundamental issue is that the USA wants to stop China from moving up the so-called value chain as it transforms into an advanced economy, said Louis Kuijs, head Asia economist at Oxford Economics.

Vietnam, another supposed "opponent" to China's expansion, is now working to "lift the comprehensive strategic cooperative partnership" with Beijing to a new level by aligning its "Two Corridors and One Economic Circle" development program with "Belt and Road" infrastructure projects.

US-based trade experts have said they expected Beijing to offer Trump's team a package of policy changes that may include some previously announced moves, such as a phase-out of joint venture requirements for some sectors, autos tariff reductions and increased purchases of USA goods. According to the NRF study, the gains in metals and machinery will come at the expense of loss of jobs in agriculture, transportation equipment, and services. "This is very much about economic strategy and the USA coming to grips with a big country running its economy in a way that the U.S.is uncomfortable with, and becoming successful, and starting to threaten US dominance".

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