Beijing’s state-run media outlet Xinhua said the world’s two largest economies had reached a “consensus on principles” during a constructive telephone call on Friday between their main trade negotiators.
The optimistic notes offered reassurance to global markets after nearly 16 months of tit-for-tat tariffs.
US and Chinese delegates had made “enormous progress” towards finalising a “phase one” agreement, although the deal is not 100 percent complete, White House economic adviser Larry Kudlow told reporters.
The office of US Trade Representative (USTR) Robert Lighthizer said in a statement that he and Treasury Secretary Steven Mnuchin made headway on a variety of issues during their call with China’s Vice Premier Liu He, and were working to resolve outstanding issues.
The USTR added that discussions would continue at the deputy level. Both Kudlow and Commerce Secretary Wilbur Ross spoke in upbeat terms about movement towards sealing the deal in separate interviews.
“I’m quite optimistic,” Kudlow told Fox Business Network as the trade talks were underway.
“The deal is not completed, but we made enormous progress. We’re beyond where we were last spring, so I’m going to play that from the optimistic side,” he later told reporters.
US officials have said that the two sides were close to an agreement in May, but talks apparently faltered when China backtracked on commitments to change its laws to resolve core US complaints about theft of intellectual property, forced technology transfers and other practices.
For now, Kudlow said planned US tariffs on Chinese-made laptops, toys and other goods that are due to go into effect on December 15 would remain on the table. He said the decision on whether they would go ahead would be made by US President Donald Trump.
Washington still hopes to sign a pact later this month, said Kudlow, despite Chile’s withdrawal as host of the Asia-Pacific Economic Cooperation summit, where Trump and Chinese President Xi Jinping had been expected to sign the agreement.
“We’re looking for a venue,” he said. “We’d love the timing to be similar, but it will all be determined.”
Agreements on agriculture, financial services and currency were nearly completed, and there had been “excellent progress” on intellectual property theft issues, Kudlow said, although some additional work remained on that topic.
He said the thorny issue of technology transfer to China would be pushed back to a second-phase trade deal. Negotiators were also due to discuss enforcement and dispute resolution during Friday’s call, he said.
Kudlow told reporters the agreement covers Chinese purchases of US farm products, and other steps to open up its market to agricultural goods.
In financial services, the agreement would “give 100 percent ownership to American companies in China”, Kudlow said, citing insurers, security companies and banking firms.
A Chinese ministry website also showed that China plans to let foreign-funded firms raise money via stock and bond issuance both in China and overseas, and to let them freely repatriate profits, as part of its moves to encourage foreign investment.
China’s Ministry of Justice published the draft rule, designed to facilitate a foreign investment law that would take effect on January 1 next year.