Progress toward a deal is welcome news for the Chinese government as top leaders gather this week in Beijing for major political events.
Sunday was the first day of the annual Chinese People’s Political Consultative Congress, a body that nominally advises on laws and policy and whose members include numerous retired officials and celebrities. The National People’s Congress, China’s rubber stamp parliament, begins its annual session on Tuesday.
The escalating trade war, in which the two sides imposed tariffs on huge chunks of each other’s exports, has piled extra pressure on the Chinese economy, which was already losing momentum as a result of government efforts to rein in risky lending.
The article listed a range of elements the potential trade deal may cover, including lower Chinese tariffs on US agricultural, chemical and auto products, as well as the continued removal of barriers to foreign investment.
In addition, China would purchase more American goods in an attempt to narrow the US trade deficit, an issue on which Trump has long focused his attention.
While the Journal report suggested a deal was a possibility rather than a certainty, Trump had earlier called the planned meeting with Xi a “signing summit.”
There have been some signs of disagreement inside the Trump administration about whether the time is right to make a deal with Beijing.
“I’m not foolish enough to think there’s one negotiation that’s going to change all the practices with China or our relationship with them,” said Lighthizer. “I view this as a process.”
“There are still significant structural differences between the two countries on issues such as forced technology transfer, intellectual property right protection and market access,” Tai Hui, JPMorgan Asset Management’s chief market strategist for Asia Pacific, said in a commentary Monday.
“Investors are fully aware of these long-term challenges, but a more sustained ceasefire on tariffs will help to reduce business uncertainty,” he added.