China offers concessions to avert trade war with U.S. - FT

PanARMENIAN.Net - China will offer the Trump administration better market access for financial sector investments and U.S. beef exports to help avert a trade war, Financial Times reports citing Chinese and U.S. officials involved in talks between the two governments.

U.S. President Donald Trump and Xi Jinping, his Chinese counterpart, decided at their first meeting in Florida last week that they needed rushed trade negotiations to produce results within 100 days. The two concessions on finance and beef are relatively easy for Beijing to make.

At present, foreign investors cannot hold a majority stake in securities and insurance companies in China. The country’s largest companies in these sectors, such as Citic Securities and China Life Insurance, have achieved enormous scale in the 15 years since the world’s second-biggest economy joined the World Trade Organisation, making them formidable competitors for new entrants to the market.

The concession to allow majority foreign ownership was discussed during Barack Obama’s administration, when Chinese and U.S. negotiators held several rounds of talks about a bilateral investment treaty, or BIT.

Trump has not yet said if he intends to pursue the treaty, which U.S. negotiators hoped would address China market access issues in a wide range of industries.

“China was prepared to [raise the investment ceilings] in the BIT but those negotiations were put on hold [after Trump’s election victory],” said one Chinese official involved in the talks. “Had Obama been in office for another six months we would have gotten there.”

China is also willing to end a ban on U.S. beef imports that has been in place since 2003, officials said, and buy more grains and other agricultural products as it seeks to reduce tensions stemming from the $347bn annual trade surplus in goods that it enjoys with its biggest trading partner.

Trump’s campaign threats last year to slap tariffs on Chinese goods and declare Beijing a currency manipulator have raised fears of a destructive trade war between the world’s two largest economies. But since taking office the former reality television star has moderated his rhetoric and cabinet officials have signalled they plan to take a more pragmatic approach.