China’s most senior economic official made an unexpected appearance at crucial trade talks with the US on Monday, signalling Beijing’s eagerness to end a bruising economic battle between the two countries.
A Chinese participant shared a photo on social media showing a smiling vice-premier Liu He, President Xi Jinping’s top economic adviser, meeting US deputy trade representative Jeff Gerrish for the two-day negotiations in Beijing.
The appearance of one of China’s most senior officials at the talks — the first since Mr Xi and Donald Trump, US president, agreed to a truce in the trade war at the G20 summit in Buenos Aires last year — surprised analysts because the negotiations are supposed to be between mid-tier bureaucrats.
Beijing’s show of support for the negotiations comes as both sides face the prospect of an economic slowdown, which is driving volatility in financial markets. The S&P 500 has fallen 13 per cent since October while Chinese stocks were the worst performing in the world last year.
A Chinese foreign ministry spokesman said on Monday that both sides had expressed a will to work together, maintaining the upbeat tone that has prevailed in Beijing since the Argentina meeting between the two presidents.
But some expect that Mr Gerrish’s immediate boss, US trade representative Robert Lighthizer, would be unwilling to resolve the issue too quickly so as not to lose leverage in his broader effort to decouple American manufacturing from China and bring it back onshore.
“Lighthizer is savvy enough that he might do a deal that leaves enough room to keep the pressure on China,” said Arthur Kroeber of Gavekal Dragonomics, a consultancy.
The Chinese in December rolled out a series of reforms long demanded by the US, including formal commitments to create a level playing field for American companies investing in the country.
Long-delayed measures to open the financial sector were announced last year.
“The US wants to keep China negotiating with itself, keep it rolling out reforms,” one former American official said.
Mr Liu’s presence on Monday was a sign of goodwill given China’s byzantine government structures that can sometime bedevil foreign negotiators.
The nuts and bolts of the negotiations over the past year have been handled by Wang Shouwen, deputy commerce minister.
Known as a “steady” person who “thinks things through pretty thoroughly”, Mr Wang’s English is excellent but he rarely strays outside his brief. “He’s very professional. He sticks to his talking points even more than most government officials,” said a US consultant who has met Mr Wang regularly.
But while Mr Gerrish’s boss Mr Lighthizer has Mr Trump’s ear, Mr Wang’s formal position as vice minister of commerce puts him many levels below Mr Xi.
Mr Liu, by contrast, has served as Mr Xi’s economic adviser for many years and has direct access to the Chinese leader.
