China announced Thursday that Vice Premier Liu He will travel to Washington to sign the first phase of the trade deal with the U.S. next week, locking in Beijing's commitment to a ceremony already announced by President Donald Trump.
Liu, who has acted as Chinese President Xi Jinping's top trade negotiator throughout the tariff conflict, will visit the U.S. from Monday through Wednesday at the head of the delegation, Ministry of Commerce spokesman Gao Feng said in Beijing.
He said he has no more information to release about the trade talks, other than that the teams remain in close contact.
The statement is the first Chinese confirmation of the signing, which Trump said would be Wednesday. Trump has also said he will go to Beijing after the deal is signed to begin negotiations on the second phase.
Under the accord, announced Dec. 13, Trump agreed to suspend plans for new tariffs on Chinese imports and reduced some existing levies, while Beijing agreed to increase agricultural purchases. The precise terms of the agreement have not been revealed. U.S. Trade Representative Robert Lighthizer has said he expects the 86-page document will be publicly released after it is signed.
The move at least temporarily calms fears of an escalating trade war between the world's two largest economies, at a time when investors are nervous over conflict in the Middle East and rising oil prices.
Liu will travel with the titles of Politburo member, vice premier and top trade negotiator, according to Gao. There was no mention of whether he will be designated a special envoy for Xi, a title he held on some previous trips to Washington.
CORPORATE DEALS
The U.S. and China are finalizing a bevy of long-running corporate deals ahead of next week's signing, according to people familiar with the arrangements.
Along with the delegation led by Liu, executives from American and Chinese companies will also attend the White House event, said the people, who asked not to be named discussing private plans. The People's Bank of China governor, Yi Gang, and Chinese Minister of Commerce Zhong Shan will also participate, they said.
Just as plans for the signature of the initial stage are being finalized, Trump wants to start negotiations on the second phase "right away," he told reporters in Washington on Thursday, adding that the parties might wait until after the U.S. presidential election in November to finish it.
While few details have emerged about what's exactly in the "phase one" document, corporate executives will be part of the ceremony to show support, some of the people familiar with the planning said. What is clearer is the effort to show the talks are bearing fruit, particularly with long-running projects in China that are finally gaining traction.
On Thursday, China highlighted a pledge to fully open up its oil and gas exploration sector. The day before, it announced American Express Co. had cleared a key hurdle to accessing its $27 trillion payments market, the latest in a series of steps it has taken to address areas of contention.
China has been opening up its financial sector at an unprecedented pace as the trade war raged on, luring global banks seeking to compete for an estimated $9 billion in annual profits. While the policy has often been cast as addressing U.S. complaints that the Asian nation has been a one-sided beneficiary of trade, domestic motivations are also behind the push.
While American Express became the first foreign company to win permission to start preparation for the business in November 2018 after forming a joint venture with LianLian, a Chinese financial-technology-services firm, the central bank's decision this week to accept its application to start a bank card clearing business was only the latest step toward final approval.
Still, the U.S. and China have a history of announcing headline-grabbing deals that don't pan out as promised. During Trump's 2017 visit to Beijing, the two countries announced $250 billion in deals, many of which turned out to be more show than substance.
"It's common to make the announcement, get the headline, and then let things fizzle," said Andrew Polk, co-founder of research firm Trivium China in Beijing. "China is not opening its market because of the trade deal, but because it's in its own interest, and is using the timing as a politically convenient tool in the trade negotiations."
CHINESE PLEDGE
For the U.S., a centerpiece in the latest deal is a Chinese pledge to boost purchases of American goods and services by at least $200 billion more than its 2017 level in two years, which Trump in October called "by far, the greatest and biggest deal ever made for our Great Patriot Farmers in the history of our Country." He also said on Twitter that the pact included Chinese purchases of $16 billion to $20 billion worth of Boeing Co. airplanes.
The U.S. administration is eager to show that it has persuaded China to do more than buy farm commodities and boost purchases in three other areas -- energy, manufactured goods and services.
U.S. financial institutions, including JPMorgan Chase & Co. and Moody's Corp., are also awaiting the regulatory go-ahead for shareholding changes that would allow them to have more control of their Chinese joint ventures.
China's Ministry of Commerce did not immediately respond to a fax seeking comments on deals that may be announced alongside the trade agreement. A spokesman told reporters Thursday that the two teams remain in close contact.
In Washington, the White House said the list of attendees is still being finalized with the Chinese.
On Thursday, China's resources ministry provided more details on the opening up of the country's oil and gas exploration, saying that companies with net assets of at least $43 million can apply for licenses as part of "a major reform." The announcement buoyed shares of a number of firms that service exploration and production in the country, even though foreign companies have been granted access to the market since July when the industry was taken off a list where overseas investors are restricted or banned.
The future is still unclear for the largest deal of Trump's 2017 trip, an agreement between Sinopec, CIC Capital Corp. and Bank of China to help develop a $43 billion liquefied natural gas export plant in Alaska.
The project is still seeking regulatory approval in the U.S., with an environmental protection report released in June saying it posed significant impacts. A final decision on authorization is due this summer. The project's high cost means it has a lower probability of being developed than other U.S. proposals, according to BloombergNEF.
In the lead-up to Wednesday's signing ceremony, executives and government officials from both sides are painting a cheerful picture of a relationship that less than five months ago had bottomed when Trump tweeted that U.S. companies with Chinese interests were "hereby ordered" to look to do business elsewhere.
Standing in stark contrast to that directive, California-based Tesla Inc. started production in China earlier this week with Chief Executive Officer Elon Musk dancing on stage at a ceremony in Shanghai.
"Win-win is always the hallmark of our economic and trade cooperation," Cui Tiankai, China's ambassador to the U.S., said at a gala Wednesday in New York for Chinese companies that invest in the U.S. "As long as we bear in mind the fundamental interests of the two peoples and respect each other's dignity, sovereignty and core interests, no difficulty is too formidable to surmount."
Information for this article was contributed by Lucille Liu, Dan Murtaugh, Jing Yang and Shawn Donnan of Bloomberg News.
A Section on 01/10/2020