China open to partial US deal despite tech blacklist

Bloomberg

China is still open to reaching a partial trade deal with the US, an official with direct knowledge of the talks said, signalling that Beijing is focussed on limiting the damage to the world’s second-largest economy.
Negotiators heading to Washington for talks starting on Thursday aren’t optimistic about securing a broad agreement that would end the trade war between the two nations for good, said the official, who asked not to be named as the discussions are private.
But China would accept a limited deal as long as no more tariffs are imposed by President Donald Trump, including two rounds of higher duties set to take effect this month and in December, the official said. In return, Beijing would offer non-core concessions like purchases of agricultural products without giving in on major sticking points, the official said, without offering further details.
S&P 500 futures rose 0.9% on the news and the offshore yuan extended gains. Separately, the Financial Times reported that China is offering to increase purchases of American soybeans to 30 million tons annually from 20 million presently.
The Ministry of Commerce didn’t immediately reply to faxed questions.
The latest round of trade talks come just days after the White House announced the blacklisting of Chinese technology firms over their alleged role in oppression in the far west region of Xinjiang, as well as visa bans on officials linked to the mass detention of Muslims.
“I think there might be big breakthrough in the coming trade talks as both sides have expressed good gestures and positive signals,” said Huo Jianguo, a former Chinese commerce ministry official who is now vice chairman of the China Society For World Trade Organization Studies.
“The recent blacklist and sanctions from the US is just another usual tactic to showcase that it has multiple tools in the trade negotiations in line with Trump’s maximum pressure policy. It is hardly surprising to us and we shouldn’t take it too seriously.”
Bloomberg News reported last month that the Trump administration has discussed offering a limited deal that would delay or even roll back some US tariffs for the first time in exchange for Chinese commitments on intellectual property and agricultural purchases.
The trade talks have failed to make serious headway since negotiations collapsed in early May.