WASHINGTON – When the US-China trade talks come to a crucial point, Trump administration reckons with the Chinese leader's special envoy, Liu He, to get Beijing to accept tough new strings that are becoming increasingly controversial in Beijing.
High-bargaining negotiations resumed in the managing office building next to the White House on Thursday, where both parties focused on reaching an agreement before one per week. March 1, which could see 10% tariffs of $ 200 billion in Chinese imports rise to 25%.
Mr. Liu and his boss, President Xi Jinping's face, powerful constituencies domestically that could hamper efforts to meet US demands. The deep gaps remain between US and Chinese dealers over some fundamental issues underlying the current bilateral trade tensions, according to people following the negotiations.
China is facing pressure to stop what the United States calls illegal technology transfer and inappropriate subsidies to state-owned companies People said.
While Chinese dealers offered to stop providing state aid that distorts prices and inflict Western rivals, they have so far not made a list of subsidies that they would be willing to remove.
Instead, the Chinese side has focused its offer on major purchases of US agricultural and energy products such as soybeans, crude oil and liquefied natural gas.
Whatever is found, the United States also seeks to guarantee that it will be enforced and a means of resolving disputes.
"It's one thing to write something on a piece of paper," said Minister Mike Pompeo on Fox Business Network on Thursday. "It's another thing to have enforcement mechanisms. And I know our trading team is hard at work and make sure that the American people get it."
Dealerships for the two countries this week hold the fourth round of discussions since mid-January to try to resolve the long-standing trade dispute that has hit global markets and businesses. Even though the March 1
Herr. Liu, one of four Chinese vice premiers, has again been titled Mr. Xi's "special envoy" – a term he was given only last year but did not last for Washington's last month's trip. It suggests that he has added the power to make the compromises necessary to conclude an agreement. In this regard, the Hudson Institute, Chinese scientist Michael Pillsbury, who consultes the Trump trading team, says he has tried to create a bureaucratic consensus in Beijing.
"He wisely avoids having solo meetings to create consensus," said Mr. Pillsbury of the Special Envoy. "The Chinese meet only as a team and he has brought all institutional interests with him."
Nevertheless, the promises he made to his colleagues, US trade representative Robert Lighthizer and finance minister Steven Mnuchin, have not been matched by changes in the written text negotiated between the two parties, one person said after the negotiations.
This has caused US dealers to discuss whether Mr. Liu tries to lull them as a tactic or cannot get the Chinese bureaucracy to accept necessary changes.
A 67-year-old economist, Mr. Liu has known Mr. Xi since middle school. He was the manager's financial management behind the scene during his first five-year period, which began in late 2012. Enter this second period in late 2017, and the Chinese leader put Liu in charge of a broad slice of the economy – the financial system and the industrial sector and the trade negotiations with Washington.
Earlier in his career in the 2000s, Mr. Liu's reputation in the West as a reformer when he met American economists and told them that Beijing could use American pressure to force greater opening of the Chinese economy.
But he has not had much success turning that tactic into political victories. Since the beginning of last year, Mr. Liu and some of his team tried to speed up the opening of China's fast-growing foreign insurance sector, according to people with knowledge of the case.
Such efforts have experienced a sharp decline from state-owned insurance giants, including People's Insurance Co. and its state regulator.
At present, Beijing has promised to remove boxes of foreign ownership of Chinese insurance companies in three years.
Chinese officials say they have already taken concrete steps towards the reform, referring to more liberal rules for foreign competitors in sectors such as cars and financial services and harder enforcement of intellectual property protection. Beijing sees these changes as in its interest.
But even here Mr. Liu made compromises. Removing borders on foreign ownership in these sectors will not enter into force immediately as the United States desires. China wants to give domestic companies, especially state-owned, more time to prepare for the changes.
"No one should expect China to swallow the" bitter fruit "that undermines its own development," a senior Chinese official said. "It is the guiding principle that President Xi set for Chinese traders."
Mr. Liu has also had trouble getting changes in the country's large state sector.
Nevertheless, Mr. Trump put on the fact that building a good relationship with Mr. Liu will help him get the deal he wants. At the end of January, he invited him to the Oval Office for the second time, while journalists recorded the events.
He praised the Chinese envoy. After Mr. Liu promised in English to buy soybeans – an implicit recognition of Mr. Trump's repeated desire to cut the trade deficit in China with China thanked Mr. Trump him and said "it will make our farmers very happy."
He called Mr. Liu "one of my friends" and "one of the most respected men in all of China and, in fact, one of the most respected men in the world." on his will to speak to the president in English, rather than Chinese.
Mr. Trump is expected to invite Liu back to the oval office on Friday afternoon when talks are scheduled to conclude.