China says making massive concession on US trade deal is fake news

China has dismissed as “rumors” previous news reports that Beijing had offered to cut its trade surplus with the United States by $200 billion a year.

Reports by Reuters and Bloomberg citing unnamed sources saying Beijing had made such an offer were “pure fantasy and rumors,” according to the official People’s Daily.

Chinese Foreign Ministry spokesperson Lu Kang reiterated the statement, telling reporters, “this rumour is not true. This I can confirm to you.”

Hitting the $200 billion number would entail Beijing almost doubling its annual purchases of American goods, and China trade watchers have expressed skepticism as to whether the figure is achievable.

According to figures from the US, the trade imbalance between the two countries was $375 billion last year, in China’s favor.

China’s Vice-premier Liu He is currently in Washington for talks with US officials in a bid to avert a trade war between the two nations. He met US President Donald Trump on Thursday.

Talking trade with the Vice Premier of the People’s Republic of China, Liu He. pic.twitter.com/9T7Iq6F3Xe

— Donald J. Trump (@realDonaldTrump) May 17, 2018

No preconditions, no concessions

An article published on the social media account of People’s Daily, the Communist Party mouthpiece, said China will not enter into negotiations on the issue as long as the US sets preconditions for the talks.

“Some people are worried that China will make major unilateral concessions. Such worries are unfounded,” the People’s Daily article said, citing people familiar with the talks.

“Neither side gave much away and the negotiations were still deadlocked a few hours before the meeting between Trump and Liu,” it said.

The negotiations are ongoing, and the talk is tough, it said.

Trade troubles

Narrowing the trade deficit is a priority for Trump, who has vowed to put “America first” from his first day in office.

But Julian Evans-Pritchard, an economist with Capital Economics, told the South China Morning Post that the trade imbalance is just one of many issues in the trade spat between the world’s two largest economies.

“The trade balance is one of the issues China can make concessions on with the least real costs,” he said. 

“The broader issues that people like [United States Trade Representative] Robert Lighthizer are concerned about are unfair competition and intellectual property, and those are not going to be fixed by artificially reducing the deficit.”

In a possible gesture of goodwill to the US, China announced that it had dropped an anti-dumping probe into sorghum imports from the US, although for the time being a 178.6% tariff on the crop, introduced in April, will remain in place.

Additional reporting by Frank Tang and Wendy Wu