Trade war, day 187: Talks are extended to third day in Beijing

U.S.-China trade talks between mid-level officials, which were scheduled for January 7-8, have been extended a day, the U.S. Trade Representative confirmed to the South China Morning Post.

This is probably a positive signal, as it’s an indication that “the whole thing has not blown up yet and that they believe that it’s worthwhile to spend more time together,” Claire Reade, a former China-focused official at the USTR told SCMP.

• The Trump administration is talking up the prospects of a deal: Minutes after negotiations reportedly wrapped up in the evening in Beijing on January 8, Donald Trump tweeted, “Talks with China are going very well!”
• “I think there’s a very good chance that we will get a reasonable settlement that China can live with, that we can live with and that addresses all of the key issues,” U.S. Commerce Secretary Wilbur Ross told CNBC yesterday.
• But: “one big challenge is figuring out how to hold Beijing to commitments to keep Chinese firms and officials from pressuring U.S. partners into transferring technology against their will. The U.S. Trade Representative Office has been asking industry groups and think tanks for suggestions on how they should carry out such enforcement,” according to the Wall Street Journal (paywall).
• The two sides remain “far from striking a deal,” the Journal says.
• “We will release a detailed readout after [the talks] are concluded,” the Chinese foreign ministry said, Bloomberg reports (porous paywall).
• The U.S. has “sought to delay” the next round of talks, the New York Times says (porous paywall), until after Donald Trump’s State of the Union address on January 29. That would leave just three business days before the week of February 4, when China goes on Lunar New Year holiday to celebrate the start of the Year of the Pig (which officially begins on February 5).
• That’s a problem for Beijing, because it would prefer for economic official Liú Hè 刘鹤 to visit D.C. for Cabinet-level talks and come away with positive results a bit farther in advance of the holiday, to shore up consumer sentiment. Liu made an unexpected appearance at talks yesterday, we noted for Access members (paywall), indicating Beijing’s eagerness to find a deal.

Other relevant news:

• Analysis
  China’s team of crack trade negotiators will extract their ‘pound of flesh’, experts say / SCMP
  “Those who have direct experience of thrashing out trade deals with Chinese officials over the years have described them as being straight-talking and clear in what they want to achieve. However, scepticism remains as to whether China makes good on these pledges in the long run.”
• Stock market reaction
  Global stocks rise amid China-US trade optimism / Bloomberg News Network
• Trade of genetically modified crops
  China gives long-awaited GM crop approvals amid U.S. trade talks / Reuters
• Chinese ambassador advocates for U.S.-China business ties
  Cui Tiankai slams ‘cold warriors,’ tells Chinese firms to learn from Americans / SCMP
• Detained Canadians
  Canadian diplomats in China meet second detained citizen, Michael Spavor / Reuters via SCMP
• Supply chain shift
  Trade War Fuels Majority of Export Manufacturers’ Shift Out of China, Survey Shows / Caixin (paywall)
• Huawei’s connections to Skycom
  New documents link Huawei to suspected front companies in Iran and Syria, and may bolster US case against Meng Wanzhou / Reuters via SCMP
  More about Huawei and Skycom on Access (paywall): Meng Wanzhou is accused of fraud and violating Iran sanctions
• Rhetorical support for private sector, and technological self-reliance
  China’s science and tech minister calls on private enterprises to develop ‘core technologies’ / SCMP

Previously in The China Project’s trade war coverage:

Trade war, day 182: Weak China sales for Apple