China trade czar to visit US for talks ahead of March deadline

Beijing

CHINA'S top trade negotiator will travel to the United States for talks later this month ahead of a March deadline to avoid bruising tariff hikes, the commerce ministry said Thursday.

Vice-Premier Liu He will visit Washington on January 30-31 for the negotiations, the ministry said, following up on talks between lower-level officials in Beijing earlier this month.

US President Donald Trump and Chinese President Xi Jinping agreed to a three-month trade war truce in December, suspending US plans to increase tariffs on Chinese goods to give negotiators space to find a solution.

Mr Liu and US officials will "hold negotiations on economic and trade issues and work together to push forward and implement the important consensus" reached by Mr Xi and Mr Trump, ministry spokesman Gao Feng told reporters.

But Mr Liu's trip could run into complications after a Wednesday report said US authorities were in the advanced stages of a criminal probe that could result in an indictment of Chinese telecoms giant Huawei.

Citing anonymous sources, the Wall Street Journal said the Department of Justice was looking into allegations of theft of trade secrets from Huawei's US business partners, including a T-Mobile robotic device used to test smartphones.

US lawmakers also introduced a bill to ban the export of American parts and components to Chinese telecoms companies which are in violation of US export control or sanctions laws, with Huawei and fellow Chinese firm ZTE the likely targets.

China has blasted the US actions. "The whole world is very clear that the real intention of the United States is to use every possible piece of state machinery to suppress and smear China's high-tech companies," said foreign ministry spokeswoman Hua Chunying.

The US lawmakers' actions reeked of "extreme arrogance", she said, adding: "The actions of the US are not the normal actions of a normal country, let alone the world's leading power." Canada's arrest of Huawei's chief financial officer Meng Wanzhou at the request of the United States on fraud charges related to Iran sanctions violations has already infuriated Beijing. Ms Meng is the daughter of the company's founder.

Two Canadians have been detained in China since her arrest and a third has been sentenced to death on drug trafficking charges - moves observers see as attempts by Beijing to pressure Ottawa over her case.

Huawei, the world's second-largest smartphone maker and biggest producer of telecommunications equipment, has for years been under scrutiny in the US over purported links to the Chinese government.

US officials have said last week's talks in Beijing "went just fine" but few details from the meeting have emerged.

Mr Liu will travel at the invitation of US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer, Mr Gao said.

Washington has been clamouring for an end to the forced transfer - and even theft - of American technology, as well as steep government subsidies for Chinese companies.

The Trump administration also wants Beijing to buy more American goods to narrow a yawning trade gap and allow foreign players better access to the Chinese market.

China's trade surplus with the United States hit a record US$323.3 billion in 2018, Chinese customs data showed on Monday.

However, in a sign that the White House's measures are beginning to have an impact, China's exports to the US sank in December.

The Trump administration has imposed tariffs on US$250 billion worth of Chinese imports, prompting Beijing to hit back with duties on US$110 billion in US products.

Without a resolution, punitive US duty rates on US$200 billion in Chinese goods are due to rise to 25 per cent from 10 per cent on Mar 2.

While China grapples with the trade war, its economy has been slowing down.

Government officials have said China is expected to have hit its growth target of around 6.5 per cent last year, down from 6.9 per cent in 2017 and its slowest pace in almost three decades.

China will release its 2018 GDP growth data on Monday. Recent statistics point to a slowdown.

Annual passenger car sales fell last year for the first time in more than 20 years, as the trade war with the US rocked consumer confidence and Beijing reined in car financing channels.

And the cost of producing goods in China's factories slowed sharply in December, a sign demand remains weak, while consumer inflation also flagged.

Official data showed the manufacturing sector contracted in December for the first time in more than two years. AFP