China Wants to Change the Conversation Around Trade War to End Standoff with U.S.

China is seeking to shift the breadth of its trade talks with the United States in hopes of catalyzing an agreement to end the protracted dispute between the world's two largest economies, according to an exclusive Wall Street Journal report published on Thursday morning.

The report, which cited "people familiar with the plan," said that China hopes to refocus negotiations on trade issues and sideline "national security" tensions that have arisen between the countries.

After the latest round of discussions between the countries faltered in May, the U.S. State Department's approval of $2.2 billion in arms to Taiwan evoked the ire of the Chinese government. Beijing has also alleged that the U.S. is helping incite protests in Hong Kong, which began over a now-withdrawn bill that would have allowed extradition from Hong Kong to mainland China and have continued for more than three months.

The countries are set to meet for renewed negotiations next month.

The Journal report comes just a day after President Donald Trump tweeted on Wednesday that he would delay planned tariffs on an additional $250 billion of Chinese imports for two weeks, pushing back the implementation date from October 1 to October 15. He said the move was a "gesture of good will" since China would be celebrating its 70th anniversary on October 1. Trump's announcement came after China said it would, for a year, exempt 16 U.S. products from planned retaliatory tariffs.

The president also tweeted on Thursday that "It is expected that China will be buying large amounts of our agricultural products!" China had halted all agricultural imports from the U.S. after Trump announced early last month that he was planning to levy new tariffs on Beijing.

Despite the positive overtures between the two countries, room for skepticism still abounds given the ideological gulf separating the countries. China and the U.S. hold divergent views of technology transfers which, along with the U.S. trade deficit, has been a central point of contention between the two Beijing and Washington.

Although the Chinese legislature passed a law in March to address U.S. concerns about forced technology transfer, a survey released in May found that European businesses said that such practices had increased in the last two years.

And, as the Wall Street Journal report noted, the two countries will likely disagree on what qualifies as a national security threat.

"I think there's a couple more chapters yet to be written in the trade war," James McCormack, the global head of sovereign ratings at Fitch, told CNBC on Thursday.

Xi Trump
President Donald Trump, Japan's Prime Minister Shinzo Abe, China's President Xi Jinping, World Trade Organisation (WTO) Director-General Roberto Azevedo and Australia's Prime Minister Scott Morrison attend a meeting on the digital economy at the G20 Summit in Osaka, Japan, on June 28. JACQUES WITT/AFP/Getty Images
China Wants to Change the Conversation Around Trade War to End Standoff with U.S. | News