U.S. Treasury Secretary Steven Mnuchin sounded a positive note Friday about talks between U.S. and Chinese officials ahead of a second day of meetings aimed at easing tensions that have taken the world's two largest economies the closest they've ever come to a trade war.
It's as well that the latest United States global trade statistics show that America's external account is improving and this could help temper tensions between the opposing sides.
"Our great financial team is in China trying to negotiate a level playing field on trade!" he tweeted. "But if they are able to promise that they are willing to sit down and continue the dialogue and try and resolve their differences, at least that would signal that the relationship between the two governments is warming up".
By contrast, after a series of bureaucratic reorganizations in recent months, many of China's top trade negotiators are now economists and bankers with little practical experience in trade matters.
US-based trade experts have said they expected Beijing to offer Trump's team a package of policy changes that may include some previously announced moves, such as a phase-out of joint venture requirements for some sectors, autos tariff reductions and increased purchases of United States goods. It recently pledged to do away with a 25 percent tariff on imported foreign cars, albeit by 2022.
China complains to the World Trade Organization about newly imposed US tariffs on steel and aluminum imports.
The discussions are expected to cover a wide range of USA complaints about China's trade practices, from accusations of forced technology transfers to state subsidies for technology development. A meeting with Xi might suggest signs of progress, analysts said.
The talks are unlikely to accomplish much, noted Arthur Kroeber, head of research for Gavekal Research.
China's trade partners, including some officials in the European Union, have warned that increased scrutiny of Chinese foreign investment would be an inevitable response to a lack of reciprocal access for their companies in China. "China will make some concessions, but if Washington's appetite is too big, that will be tough for Beijing to accept". He added that the main issue is China's repeated unwillingness to further open its markets.
Under president Xi, a program known as "Made in China 2025" aims to make the country a tech superpower by advancing development of industries that include semiconductors, artificial intelligence, pharmaceuticals and electric vehicles. Having seen reproaches of several senior American officials participating in se meetings, it is very likely that complaints about what United States describes as "unfair practices", including allegations of transfers from Forced technology by American companies operating in China or delivery of State subsidies to certain sectors.
The policy clearly sets goals for domestic industries to dominate over foreign players in the Chinese market and globally.
Trump is seeking to cut the American trade deficit with China - totaling $375 billion (€313 billion) previous year - by $100 billion and gain concessions over policies that force foreign companies to share technology with Chinese partners.
On that strategic blueprint, however, Beijing looks unlike to relinquish any ground says Yu Miaojie, a professor at Peking University's National School of Development.
"I would be somewhat surprised if there was any real change in the negotiating stance of either party", he said.
Echoing Xinhua's words, English-language newspaper China Daily said in an editorial that China would "stand up to the US' bullying as necessary". "So I don't know when we're going to have a solution".