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Abu Dhabi, UAESaturday 15 December 2018

China disputes report of $200bn trade deficit offer

No such offer has been made to the US, according to Chinese state social media

The Chinese social media posts dismissing the report were made on accounts operated by the Xinhua News Agency and the People’s Daily. Damir Sagolj / Reuters
The Chinese social media posts dismissing the report were made on accounts operated by the Xinhua News Agency and the People’s Daily. Damir Sagolj / Reuters

China cast doubt on reports that it had offered to reduce its annual trade surplus with the US by $200 billion through increased imports of American products.

The offer was made during talks in Washington this week as vice premier Liu He visited to try to resolve a trade dispute, according to a Trump administration official who spoke on condition of anonymity.

On Friday, two posts on Chinese state social media disputed the report, and a foreign ministry official said no such offer had been made, to his knowledge.

In a sign that the Chinese government is seeking a conciliatory stance, on Friday it announced that it would end its anti-dumping and anti-subsidy investigation into imports of US sorghum, citing “public interest.” That move comes days after the restarting of a review of Qualcomm's application to acquire NXP Semiconductors.

“If Trump can cut a deal with China for a $200bn reduction in the bilateral trade deficit, then he’ll have won the trade deal of the century," said Rajiv Biswas, chief Asia-Pacific economist at IHS Markit in Singapore. "The devil will be in the details, with key factors being the timeframe over which China is offering to achieve this reduction."

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A $200bn reduction in the US trade gap with China by 2020 was on a list of demands the Trump administration made earlier this month as Treasury Secretary Steven Mnuchin led a delegation to Beijing. That mission left with little common ground with China and reports emerging of infighting among the U.S. officials. The US merchandise trade deficit with China hit a record $375 billion last year.

The Chinese social media posts, made on accounts operated by the Xinhua News Agency and the People’s Daily, sought to reassure readers that no “unilateral concessions” would be made, and that China will “never negotiate” under conditions set by the US.

The US had earlier made additional demands, including a halt to subsidies and other government support for the Made in China 2025 plan that targets strategic industries from robotics to new-energy vehicles. China had made its own demands, including giving equal treatment to its investment, and warned US companies may be excluded from measures to open its economy.