Liu flies to US for talks amid Trump ZTE boost

China says it is sending Vice Premier Liu He to the United States for talks aimed at cooling a trade dispute that threatens to upend markets from soybeans to steel, and welcome comments by US President Donald Trump hinting at an easing of sanctions on embattled mainland telecoms firm ZTE. The Foreign Ministry said Liu will visit from today to Saturday for consultations with US Treasury Secretary Steve Mnuchin. Spokesman Lu Kang also said China appreciated tweets by Trump saying he would help ZTE Corp get "back into business" because too many jobs in China are at stake after the US government cut off access to ZTE's American suppliers. "We think highly of the US statement. We are currently in close communication over details of the implementation," Lu said. Partially state-owned ZTE makes cellphones, network switching equipment and other telecommunications equipment. Last month, the US Commerce Department banned it from buying US technology or components for seven years after it misled regulators by failing to discipline employees involved in illegal exports and instead paid them bonuses. Trump's unexpected announcement was a stunning reversal, given Washington's tough stance on Chinese trade practices that have put the world's two largest economies on course for a possible trade war. Sources briefed on the matter said Beijing had demanded the ZTE issue be resolved as a prerequisite for broader trade negotiations. "Too many jobs in China lost. Commerce Department has been instructed to get it done!" Trump tweeted, saying he and President Xi Jinping were working together on a solution for ZTE. The penalty cut off ZTE's access to key components such as semiconductors, prompting China's second-largest maker of telecom equipment to say last week that it had suspended its main operations. During trade talks in Beijing earlier this month, Liu told Mnuchin that China would not continue talks on broader bilateral trade disputes unless Washington agreed to ease the crushing sanctions on ZTE, two people briefed on those meetings said. "The message was, 'we have to deal with ZTE before we continue talks,'" one of the people said. Both sources said China was willing in principle to import more US agriculture products in return for Washington smoothing out penalties against ZTE, but they did not offer details.

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January 2019