What hope for markets in the US-China trade talks?

What hope for markets in the US-China trade talks?

Ministry spokesman Lu Kang said Monday that Chinese military aircraft and naval vessels were dispatched to identify the USA vessel and warn it to leave the area near disputed islands in the South China Sea.

"Crude continues to extend gains as early reports from Beijing, regarding trade negotiations, are fuelling optimism around successful trade talks between the usa and China, " said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

The Chinese Ministry of Commerce issued a statement saying the two sides had "detailed exchanges" and would "maintain close contact" but gave no details.

The trade talks in Beijing were carried over into an unscheduled third day, amid signs of progress on issues including Chinese purchases of USA farm and energy commodities. "I don't know the timing and exactly what that will look like, but what I can be sure of is that we are moving towards a more balanced and reciprocal trade agreement with China".

"The China talks are going very well", he said.

"We've been hearing reports that there's been a narrowing of a gap between the two sides, but a narrowing of a gap is not a bridging of a gap, and it's a pretty wide gap".

In December, top Trump administration officials had said the trade commitments amounted to $1.2 trillion, but did not specify the composition or time period.

The talks were seen as a litmus test of whether a lasting deal can be reached before March 2, when the Trump administration plans to hike tariffs on $200 billion of Chinese goods from 10% to 25%.

"China would need to significantly recalibrate its industrial policies to fully meet the US trade team's demands", Nick Marro of the Economist Intelligence Unit said in a report. Liu made a brief appearance at the talks in Beijing on Monday, boosting optimism that China was serious about making progress.

The extra day of talks came amid signs of progress on issues including purchases of US farm and energy commodities and increased access to China's markets. On Tuesday, Hong Kong's Hang Seng index rose more than 2% and Japan's Nikkei more than 1%.

Latest US-China Trade Talks Focus on China’s Pledge to Buy More US Goods – USTR

The oil price jumps were in line with Asian stock markets, which climbed to 3-1/2 week highs on Wednesday.

One of the biggest challenges to any deal would be to ensure that China enforces whatever is agreed to stop technology transfers, intellectual property theft and hacking.

"If the results of the talks are positive, it would be beneficial for both China and the U.S. and also a good news for the global economy", he added.

Three days of U.S. Chinese officials have suggested they could revise some of their industrial plans but have but won't abandon larger goals that they consider a path to prosperity and global influence.

Officials discussed the need for any deal to include "ongoing verification and effective enforcement".

In what was widely seen as a goodwill gesture, China on Tuesday issued long-awaited approvals for the import of five genetically modified crops, which could boost its purchases of USA grains as farmers decide which crops to plant in the spring. It's a tight window in which to nail down deep changes to China's economic model, some of which past USA administrations advocated for years and US lawmakers on both sides of the aisle support.

USA exports of crude will also enjoy the support of a still sizeable discount of West Texas Intermediate to Brent crude, which is close to US$10 a barrel.

USA companies also want action on Chinese policies they complain improperly favor local companies.

For its part, Beijing is unhappy with US export and investment curbs, such as controls on "dual use" technology with possible military applications.

With cooling economic growth raising the urgency for a settlement, this week's talks went ahead despite tension over the arrest of a Chinese tech executive in Canada on USA charges related to possible violations of trade sanctions against Iran.

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