Caixin
May 07, 2019 08:23 PM
ECONOMY

Vice Premier Liu He to Head to U.S. for Trade Talks

Chinese Vice Premier Liu He. Photo: IC Photo
Chinese Vice Premier Liu He. Photo: IC Photo

Chinese Vice Premier Liu He will head to the U.S. this week for the next round of trade talks, the government announced Tuesday.

Starting Thursday, Liu will pay a two-day visit to the country at the invitation of U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, the Ministry of Commerce said in a statement (link in Chinese).

The announcement immediately sent China stocks higher, with the benchmark Shanghai Composite Index closing up 0.69% at 2,926.39.

Chinese stocks plunged 5.58% on Monday after U.S. President Donald Trump tweeted over the weekend that he would increase additional tariffs on $200 billion worth of Chinese goods to 25% on Friday — up from the current 10%.

Trump criticized the bilateral negotiations to resolve the trade dispute for moving “too slowly” and threatened to subject another $325 billion worth of products to a similar punitive rate.

Shares initially bounced back slightly on Tuesday before sinking into negative territory in the afternoon on more pessimism. But they rallied in the last 40 minutes of trading following the announcement of Liu’s visit.

The market had been closely watching China’s response to Trump’s statement.

In particular, observers were paying close attention to whether Beijing would scrap Liu’s visit to the U.S. “If Liu He goes to the US according to the original plan, it implies that … a deal will happen soon,” Larry Hu and Irene Wu of consulting firm Macquarie Capital Ltd. said in a note on Monday. “If China only sends a junior team to the US, the market might have to wait longer to see who blinks first.”

Prior to the Ministry of Commerce’s announcement, Geng Shuang, a spokesperson of the Ministry of Foreign Affairs, said on Monday that Chinese negotiators were still preparing to head to the U.S., without specifying whether Liu would go.

Yang Ge contributed to this report.

Contact reporter Fran Wang (fangwang@caixin.com)

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