Published: Wed, January 09, 2019
Worldwide | By Myra Stephens

USA conducts latest South China Sea sail-by amid trade talks

USA conducts latest South China Sea sail-by amid trade talks

An official Chinese newspaper warned Washington not to demand too much from Beijing as talks on ending their tariff war entered a second day Tuesday with no word on possible progress.

"The main thing is the administration's implied progress on talks with China - that's something that market sees as very important", said Rick Meckler, partner at Cherry Lane Investments.

The meeting between the US delegation - led by Deputy US Trade Representative Jeffrey Gerrish and including officials from the Treasury, Commerce, Agriculture and Energy Departments - and the Chinese side ran late into Tuesday night. Vice Premier Liu He made an appearance at the talks on Monday in a sign the Chinese were also pushing for a positive outcome. US negotiators are headed into talks with Chinese counterparts as the two countries seek a deal to end a trade war that has raised fears of global economic turmoil.

Lu Kang, spokesman for China's foreign ministry, said on Monday that Chinese military aircraft and naval vessels were dispatched to identify the United States vessel and warn it to leave the area near the disputed Paracel Islands in the South China Sea, claimed by China.

The discussions are the first face-to-face interactions between the US and China since both presidents met in Argentina and agreed to a temporary truce in their tit-for-tat tariff war.

The United States and China will continue trade talks in Beijing for an unscheduled third day, U.S. officials said on Tuesday amid signs of progress on issues including purchases of USA farm and energy commodities and increased access to China's markets.

Last year, a Chinese Peoples' Liberation Army Navy destroyer was attempted to intercept a U.S. Navy destroyer conducting a freedom of navigation operation in the Spratly group when it came within what the United States said was just 40 feet of the bow of the U.S. warship, forcing it to maneuver.

"Talks with China are going very well!" president Trump declared Tuesday, a day after the in-person talks in Beijing began with the participation of vice premier Liu and the US trade delegation.

There are growing concerns that the trade war could escalate into a broader conflict between the USA and China, as top Trump administration officials have attacked China on issues ranging from alleged human rights abuses to influence operations in the US. China responded by imposing penalties on $110 billion of American goods, slowing customs clearance for US companies and suspending issuing licenses in finance and other businesses.

The operation was not about any one country or to make a political statement, McMarr said.

The two-day talks were scheduled to end Tuesday, but reports suggest meetings will continue beyond that. No timing was given and it wasn't immediately clear if the US delegation would release a statement.

Even so, Lu said, "China's development has ample tenacity and huge potential". That includes giving specific dates for making purchases, and making assurances that Beijing won't hinder USA companies from gaining access to China's market. "We have firm confidence in the strong long-term fundamentals of the Chinese economy".

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