Vice-Premier He Lifeng struck a confident tone as he prepared to lead a crucial opening round of trade talks with US officials later this week, saying that China’s economy was performing well and would continue to open up to foreign investment.
“China’s economy is off to a good start so far this year ... society’s confidence and expectations continued to increase,” He said during a meeting with the visiting head of the Abu Dhabi Investment Authority in Beijing.
“We welcome foreign financial institutions and long-term investors ... to come to China to expand their business and share development opportunities,” he added, according to a readout published by the Chinese government on Wednesday.
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These were He’s first public remarks since Beijing announced that he would lead the Chinese delegation set to meet with US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer in Switzerland this weekend.
The talks will be the first official trade negotiations between China and the United States since US President Donald Trump’s return to office in January, with many hoping that the meeting will mark a first step towards de-escalating an unprecedented trade war between the world’s two largest economies.
Trump has imposed an eye-watering 145 per cent of additional tariffs on Chinese goods so far this year, leading Beijing to hit back with 125 per cent of retaliatory duties. The sky-high levies have already triggered a sharp slowdown in trade, rattled financial markets, and sparked concerns about millions of potential job losses in both countries.
Yet, analysts have warned that the road to a lasting US-China trade deal remains long and laborious.
“Investors shouldn’t mistake China engagement with China deals: that will be yet another example of markets getting way over their skis,” Tarry Haines, founder of US-based consulting firm Pangaea Policy, wrote in a note on Tuesday.
Haines argued that the discussions between the US and China were driven by geopolitical interests more than simple economic interests. The goal of the US administration was to change China’s geopolitical actions, which would not come quickly.
The US treasury secretary himself was among the first to urge investors to curb their enthusiasm, in comments made shortly after his department announced the meeting with Chinese trade negotiators.
“My sense is, this will be about de-escalation, not about the big trade deal. We’ve got to de-escalate before we can move forward,” Scott Bessent told Fox News on Tuesday.
Many in China are also sceptical about whether the US can be trusted to make a deal in the current environment.
“Do not fantasise that you can strike a ‘big deal’ with Trump that can be balanced and stable in the long-term. This point is now clear to all countries, so they are less and less willing to easily reach a deal with him,” said Chen Dongxiao, president of the Shanghai Institutes for International Studies, in an interview with official newspaper Jiefang Daily published Tuesday.
“Still, it is entirely possible to reach mutual compromises in certain small, localised and specific areas,” Chen added.
More from South China Morning Post:
- China moves to bolster its economy ahead of US trade talks
- China-US container shipments continue to sink under hefty tariff ballast
- China avoiding ‘disruptive’ de-dollarisation despite US trade war, report says
- US tariffs could endanger 16 million export jobs in China: Goldman Sachs
- What tariff rate do China’s goods now actually face in the US?
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