On Tuesday, the Chinese and American negotiators has meet in Shanghai to resume trade talks between the two biggest economies in the world, with both the nations downplaying expectations there will be an impending deal. 

The negotiations in financial hub of China will be the first face-to-face discussion since it collapsed in May, when the United States President Donald Trump has alleged China of breaking on its commitments. 

Beijing and Washington have till date hit each other with penal tariffs covered over $360 billion in both way trade, in a tension on demand for China to restrain the reported theft of US technology and offer a level-playing field to United States firms. 

The scheduled two days talks are to be led on the American side by Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer.  

The negotiations came as China faces heavy pressure over ongoing civil disruption in Hong Kong, and remaining ill-feeling between China and the United States. 

Days ahead of Shanghai meeting, President Trump has threatened to pull recognition of the status of China as a developing nation at the World Trade Organization – indicated an irritable response from China about the “arrogance and selfishness” of America, which claims media using force ahead of trade talks. 

On Friday, the US President said that he believed that Chinese negotiators were desired to delay a deal until 2020 Presidential Election in the United States, adding that “when I win… they’re all going to sign deals.”

President Trump has angered the Chinese negotiators by claiming that slow economy is forcing them to make trade deal, and blacklisting of Huawei over concerned of national security. 

However, resume of trade negotiation is considered as a positive aspect – even if little is expected – following a deal agreed between Chinese President Xi Jinping and United States President Doandl Trump at G20 Summit in June. 

A Senior Vice President at the US-China Business Council, Jake Parker said that “realistically, this round of talks is about clarifying where the two sides stand after a significant lull in engagement.”

He continued, “There also needs to be a focus on rebuilding trust that was present in April but has since dissipated.”

Modest Adjustment

Holding discussion in Shanghai is also a signal to a time of better relationship, as resident of 1972 Shanghai Communique – as a vital step in building diplomatic relationship between the two biggest economies in the world. 

Vice Premier Liu He is expected to lead the talks for China, along with Chinese Commerce Minister Zhong Shan, considered as a tougher negotiator. 

“Minister Zhong Shan, like Liu He, is a 19th Party Congress Central Committee member, so his involvement would indicate an elevation of participation on the Chinese side,” said Mr. Parker.

He continued, “His appointment could offer another senior voice… on the Chinese side.”

Both the nations were busy lowering their expectations in the run-up to discuss. 

Last week, Mnuchin told sources that there were still “a lot of issues” while Chinese sources wrote that it is “widely believed that trade talks will take a long time.”

Vanguard Markets Singapore’s Managing Partner Stephen Innes said that there are likely to be “modest soft-pedalled concessions”, claims new Chinese purchases of the US-based agricultural products or pause of further tariff increases in exports of China to the United States. 

Innes said, “Following another month of escalating tensions, agreement on practically anything will be a positive.”

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