Published: Thu, October 10, 2019
Economy | By

China made no progress in deputy-level trade talks: SCMP

China made no progress in deputy-level trade talks: SCMP

With negotiations between Beijing and Washington getting underway on Thursday, market watchers say any concessions from China would be touted as a success from USA officials and that might fuel further yen weakness and gains in the Aussie dollar.

Stock futures later recovered some of those losses after the White House told CNBC's Kayla Tausche that the SCMP report was inaccurate. He added that he would be meeting with Liu at the White House on Friday.

Markets saw series of ups and downs on Thursday morning as investors awaited developments in the talks to resolve an ongoing trade war between Washington and Beijing, which are now in their third day.

Ahead of the meeting a Chinese official told Bloomberg that China was open to a "partial trade deal" but talks have been further complicated by the U.S. decision to blacklist 28 Chinese tech firms over Beijing's treatment of Uighur Muslims and other predominantly Muslim ethnic minorities.

"This is the emotional roller coaster that we have to strap in for while these negotiations get hashed out", Jeff Kilburg, the CEO at KKM Financial, said in an email. The issue of forced technology transfers, which China refused to put on the table, was the reason talks were at a standstill, SCMP reported.

He said that China wants to make a deal with the U.S.

Just since Monday, Washington has slapped visa restrictions on senior Chinese officials and blacklisted more than two dozen Chinese firms, accusing them of persecuting ethnic Muslims in China's western Xinjiang region.

The US dollar was on track for its biggest daily drop in five weeks on Thursday against its rivals as the prospects of a partial trade deal between China and the United States fuelled appetite for trade-oriented currencies such as the euro and the Australian dollar.

Without significant progress during the talks, US President Donald Trump is set to hike the tariff rate on US$250 billion worth of Chinese goods to 30 per cent from 25 per cent next Tuesday. At the same time, a fight over free speech between China and the National Basketball Association, triggered by a tweet backing Hong Kong's protesters, has underscored the heated tensions.

No details were made public about the U.S. Broader trade negotiations between the two countries broke down in May after the US accused China of backtracking on its commitments.

According to people familiar with the currency language, the pact largely resembles what the USA agreed to in a new trade agreement with Mexico and Canada and also incorporates transparency commitments included in Group of 20 statements.

"The view on the currency story could be swinging here", said Saxo Bank's head of European currency strategy, John Hardy, "And the market is sensing that euro-dollar is the pressure point".

-With assistance from Saleha Mohsin, Livia Yap, Angus Whitley, Miao Han, Steven Yang and William Edwards.

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