context: Given numerous existing disagreements between China and the US, a pall of pessimism hangs over the coming visit by Liu He. Regardless, the gesture of communication may shore up the market.

On 17 Jan 2019, Gao Feng 高峰 MofCOM spokesperson confirmed that Liu He 刘鹤 State Council vice premier will visit Washington DC during 30 – 31 Jan 2019 for trade negotiations.

Experts believe Liu’s talks with US officials will likely centre around technology transfer, intellectual property and SOE subsidies. Certain disagreements might be resolved, but China will not sacrifice its long-term development for a trade war truce, with US restrictions on high-tech exports to China to remain a concern.

Bai Ming 白明 Chinese Academy of International Trade and Economic Cooperation director claims US-China trade negotiations have been advanced on three levels

  • presidential level: President Trump and President Xi met in December 2018 to lay down the basic tone of following talks
  • technical level: vice-ministerial negotiations were concluded in Beijing earlier this month
  • trade lead level: Liu’s plan to visit shows that previous technical negotiations have made progress and remaining issues require involvement of higher-ranking officials

Bai points out that China is willing to address US concerns in ways that are consistent with the general direction of reform and opening up. For example, the newly revised Foreign Investment Law bans forced technology transfer by administrative means. However, Bai maintains that tightening US control of high-tech product exports restricts technological development in China and other countries.