U.S., Chinese Officials to Meet Aug. 15, Assess Trade Deal--4th Update

08/04/2020 | 05:32pm

By Lingling Wei in New York and Bob Davis in Washington

The U.S. and China have agreed to high-level talks on Aug. 15 to assess Beijing's compliance with the bilateral trade agreement signed early this year, according to people briefed on the matter.

The trade pact has emerged as one of the few remaining avenues for the two countries to engage on matters of mutual concern. Relations have deteriorated in recent months, with the Trump administration hammering Beijing over the coronavirus outbreak, Hong Kong and the treatment of Uighurs in western China.

U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He, President Xi Jinping's point man on economic policies, will participate in the talks, likely via videoconference, the people said.

The focus will be on the so-called phase-one deal, which includes China's commitment to boost its U.S. imports by $200 billion over two years. So far, China has fallen well short of the pace needed to reach the target, even though it has increased purchases of American soybeans, pork, corn and other farm products in recent months.

Mr. Liu -- the lead Chinese negotiator whose portfolio includes oversight over China's technology sector -- is also expected to raise concerns about the U.S. crackdown on Chinese tech companies, the people said.

"He would want to discuss how the U.S. can work toward not surprising the Chinese with daily policy actions," one of them said.

The U.S. Trade Representative's office declined immediate comment.

Speaking at Aspen Security Forum on Tuesday, China's U.S. Ambassador Cui Tiankai said the coronavirus has impeded normal trade flows. He said the "two economic teams have been in contact with each other" and that Beijing is doing its best to implement the trade agreement.

Relations between the two countries have deteriorated since the trade pact was signed in January, with Mr. Trump repeatedly blaming China for the global spread of the coronavirus.

Beijing has hit back at the American actions with both increasingly hawkish rhetorics and actions. It immediately retaliated against Washington's sudden shutdown of the Chinese consulate in Houston by closing the U.S. consulate in the western city of Chengdu.

In many ways, the two nations are edging closer toward what some foreign-policy experts dub a New Cold War.

The popular video-sharing app TikTok has become the latest battleground, with Mr. Trump pushing for a sale of its U.S. operations -- to U.S. owners -- by its Chinese owner ByteDance Ltd. Mr. Trump and other administration officials cite concerns that data on American users could be shared with China, further rattling Zhongnanhai leadership compound.

U.S. officials are also exploring other possible actions, including targeting the mobile app WeChat by Chinese internet giant Tencent Holdings Ltd., which is hugely popular within China and widely used by Chinese overseas, according to an administration official.

"These Chinese software companies doing business in the United States, whether it's TikTok or WeChat," said Secretary of State Mike Pompeo on Sunday on Fox News, "are feeding data directly to the Chinese Communist Party, their national security apparatus."

The scheduled discussion between the two sides follows weeks of efforts by less-senior Chinese officials to court U.S. companies, which Beijing has traditionally counted on for lobbying support. The sessions have involved Mr. Liu's top aide, Liao Min, and Deputy Commerce Minister Wang Shouwen. The pair have had videoconference calls with groups led by the U.S. Chamber of Commerce, the U.S.-China Business Council and the American Chamber of Commerce in China, among others.

During those sessions, participants said, U.S. companies have brought up their concerns about the slow pace of Chinese purchases of an array of U.S. goods and services, such as energy and medical equipment, as well as regulatory issues.

As of May, China's purchases of all products covered by the trade pact were $26.9 billion, only at around 45% of their year-to-date targets, according to Chad Bown, a senior fellow and trade expert at the Peterson Institute for International Economics.

The Chinese officials, meanwhile, have reiterated their commitment to carrying out the phase-one deal and have sometimes made a pitch for U.S. companies to press the Trump administration to "stabilize the relationship."

In some of the discussions, Mr. Wang repeated Beijing's line that political issues like Hong Kong and Xinjiang are purely domestic affairs which could further poison the U.S.-China relationship if Washington continues to push hard. He sometimes directly urged U.S. companies to lobby on Beijing's behalf. Mr. Liao generally talked more broadly about the commercial relationship.

U.S. companies haven't volunteered to help out on political issues, said participants, who said they feel as if they are caught in a vise. Beijing is pushing for help while the Trump administration warns against taking such action. U.S. Attorney General William Barr recently warned U.S. companies that advocating for China could require them to file as foreign agents.

The discussion between Messrs. Lighthizer and Liu also comes as President Xi and other senior Chinese leaders are planning to hunker down for an annual two-week retreat in the resort town of Beidaihe, about 120 miles from Beijing. The secretive gathering has traditionally been an occasion for the ruling Communist party's leaders, both current and former, to discuss strategies and set policies for pressing issues and challenges.

Among this year's topics, according to some Chinese officials: how to deal with what the leadership now calls a "protracted war" with the U.S.

William Mauldin contributed to this article.

Write to Lingling Wei at lingling.wei@wsj.com and Bob Davis at bob.davis@wsj.com


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