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BEIJING – Chinese stock markets reached their highest level in nearly four years and the official media reacted with similar joy after President Trump announced that he would delay his plans to increase tariffs on the market. China.
The announcement reinforced growing optimism about ending the long-running trade war between the two largest economies in the world.
"The closer we get to the finish line, the more we have to rely on the decisive factors of rationality and calm," wrote Monday the Chinese edition of the Global Times, a nationalist tabloid, in an editorial . Trump announced his decision in a tweet. "In order to avoid new uncertainties, neither side should run after small gains when the whole situation materializes."
Customs duties on Chinese imports rising to $ 200 billion are expected to fall from 10% to 25% this Saturday if negotiators fail to reach an agreement by March 1 set by Trump.
But Trump tweeted Sunday that the US had "made substantial progress" in trade negotiations and that it was planning to welcome Chinese President Xi Jinping to Mar-a-Lago, his estate in Florida, to finalize the agreement. The Chinese state-run Xinhua News Agency also reported "substantial progress" without going into details.
Chinese equities rose sharply on the news. Shanghai Shenzhen composite benchmark indexes both rose 5.6% during trading on Monday. Overall, Chinese stocks have increased more than 25% since the beginning of the year and February will be the best month since April 2015.
[[[[Trump delays tariff increases on China, citing advanced trade talks ]
Trump said in particular that progress had been made on the structural issues of greatest concern to him, namely the protection of intellectual property, the transfer of technology, agriculture, services and currencies.
While he was campaigning for the presidency, Trump repeatedly criticized China for its unfair trade practices, ranging from industrial espionage to currency manipulation through subsidies to give Chinese companies a advantage in the global market.
Beijing was surprised to discover that it was not just a campaign rhetoric or an area in which Trump was looking for a quick victory over which he could play on Twitter, but an annunciator of his intention to embark on a long battle to correct certain imbalances in the trade relations of the two countries.
The US trade deficit with China is expected to reach more than $ 400 billion in 2018, a record.
The question now is whether the trade agreement between the two countries will equate to commitments from China to buy more US products, such as soybean and liquefied natural gas, in order to reduce this gap, or if the Trump administration can convince Beijing to embark on a painful structural process. reforms.
The two sides met last week for a seventh round of talks, the third in a month, to try to make progress on these issues.
Chinese official media said the two sides were "about to reach a mutually beneficial and win-win deal".
"The extension of the latest round of negotiations and the delayed increase in tariffs on imports from China testify to the sincerity, the great attention and the sense of urgency provoked by both China and the United States. -United", Xinhua reported. "Yet, they also indicate that there are still differences that need more time to be resolved."
[[[[Trump said the US-China talks were within reach of a breakthrough in trade relations ]
Wang Yong, a professor at the Peking University School of International Studies, said China has made many concessions, mainly to increase access to the Chinese market.
"Overall, the agreement has stabilized the expectations of the global economy," he said.
John Gong, a professor at the Beijing University of International Trade and Economics, said that there was still work to be done.
"The goal of these negotiations is not just to prevent tariff increases," he said. "We want to come back before July 6, when the first wave of tariffs was imposed."
Last July, Trump imposed tariffs of 25% on Chinese imports worth $ 34 billion and then on $ 16 billion worth of goods in August. He followed in September with additional tariffs of $ 200 billion on Chinese imports – and threatened to impose duties on the remainder, which would amount to $ 267 billion, if Beijing reacted.
Trump's Sunday night tweet showed how separate the two men were, said James Zimmerman, an American lawyer in Beijing and former president of the US Chamber of Commerce in China.
"The tariff deferral simply means that both parties realize that they are far from being viable and that to avoid a confrontation later this week, they need a respite," she said. he declared.
Earlier this week, the president hinted that the dispute over Huawei Technologies, the world's largest maker of communications equipment, was also part of the talks. When asked if he was considering dropping Huawei's criminal case under an agreement, Trump said on Friday that he would discuss the matter with the Attorney General and US lawyers.
[[[[Ministry of Justice accuses Huawei of fraud, heightening tensions between the United States and China ]
Last month, the Ministry of Justice announced criminal proceedings against Huawei and his financial director, Meng Wanzhou, alleging bank and banking fraud, a violation of US sanctions against Iran and a plot to obstruct justice in the course of the investigation.
Meng, the daughter of the well-connected founder of Huawei, has been arrested in Canada and is currently fighting extradition to the United States, where she could incur up to 30 years in prison if she were found guilty of all the counts of indictment.
China has since arrested two Canadian citizens accused of endangering national security and the Beijing authorities continue to press for Meng's release.
Zimmerman decried Trump's attempt to take advantage of China's anger after Meng's arrest.
"Tying a criminal investigation to trade negotiations is a devious horse trade and a further erosion of the rule of law," he said. "This creates a bad precedent in which we live in an era of" taking hostage and then speaking. "
The Chinese experts, however, continued to hope that the charges against Meng would be dropped and that she would be allowed to return to China.
"China-U. The agreement reached will play a positive role in maintaining China-U. S. trade in technology products, "said Wang of Peking University. "We hope that Huawei's and Meng Wanzhou's problems will be resolved or even resolved, but uncertainties remain."
Liu Yang and Lyric Li contributed to the reports.
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