Chinese Foreign Minister Wang Yi meeting French President Emmanuel Macron on October 21 in Paris

China’s Foreign Minister Wang Yi said that China will not make use of a third party in trade talks with the United States, or affect a third party, much less sacrifice a third party such as China-Europe ties. The latest round of consultations between the two sides has made substantial progress, laying an important foundation for achieving a phased agreement, he said. As the world’s largest potential market, China’s opening up is to all, and China will open up even wider not only to America, but also to France and the rest of the world, Wang stressed. China’s Foreign Minister also voiced the hope that while conducting trade talks with other countries, the EU will also not affect a third party or undermine China’s legitimate interests. He called on the EU to continue to provide a more fair, just, and non-discriminatory business environment for Chinese enterprises.

Negotiators held talks by phone last week and confirmed that the technical consultations regarding part of the text for a preliminary trade deal are essentially completed. Moreover, the United States agreed to import Chinese cooked poultry and catfish products, while China will lift a ban on U.S. poultry. Wei Jianguo, Vice President of the China Center for International Economic Exchanges, said the latest round has shown signs of easing tensions. “It is hoped that China and the U.S. can reach a deal acceptable to both sides. It will be beneficial for the development of both countries and help cushion the impact of the global economic downturn,” Wei said, adding that he is optimistic about the next stage in China-U.S. economic and trade ties.

Meanwhile, Chinese Premier Li Keqiang met with former U.S. Treasury Secretary Henry Paulson in Beijing. Li hoped the Chicago-based Paulson Institute will continue to play a positive role in developing China-U.S. relations and enhancing mutual understanding between the two peoples. Paulson said the two countries had undergone great changes and they needed to find a new way of managing their ties. Henry Paulson has visited China more than a hundred times.

The Office of the United States Trade Representative (USTR) will start a process by which U.S. stakeholders may request the exclusion of certain Chinese products from additional tariffs starting on October 31. The process will be applied to the U.S. tariff list targeting USD300 billion worth of products imported from China. They have to provide information such as whether the particular product can be replaced, or is strategically important, or related to “Made in China 2025” or other Chinese industrial programs. If the exclusion request is approved, tariffs imposed since September 1 can be refunded.

More measures will be taken to optimize foreign exchange management and facilitate cross-border trade and investment, according to a government statement. The country will further improve policies of export tax rebates, trade financing and credit insurance, and ensure that the cross-border e-commerce retail import polices are fully applied in comprehensive bonded zones step by step, it said.

Top trade officials from China and the U.S. discussed plans for Beijing to buy more American farm products, but in return, Chinese negotiators requested the cancellation of some planned and existing import tariffs. So far, Trump has only agreed to cancel an increase in tariffs on USD250 billion in Chinese goods as part of an understanding reached on agricultural purchases, increased access to China’s financial services market, improved protection for intellectual property rights (IPRs) and a currency pact. But to seal the deal, Beijing asked Washington to drop its plan to impose tariffs on USD156 billion worth of Chinese goods, including mobile phones, laptop computers and toys, set to come into force on December 15. “The Chinese want to get back to tariffs on just the original USD250 billion in goods,” one source said.

If a text can be sealed, Beijing in return would exempt some U.S. agricultural products from tariffs, including soybeans, wheat and corn. Buyers would be exempt from extra tariffs for future purchases and receive refunds for tariffs they already paid in previous purchases of the products on the list. But the ultimate amount of China’s purchases is uncertain. Trump has touted purchases of USD40-50 billion annually – far above China’s 2017 purchases of USD19.5 billion, as measured by the American Farm Bureau.

Profits at China’s industrial enterprises shrank 5.3% in September from a year earlier, marking the deepest fall since August 2015, as the trade war with the U.S. took its toll on China’s economy. In the first nine months, combined profits made by Chinese industrial enterprises fell 2.1% from the same period last year. Profits at state-owned enterprises (SOEs) fell 9.6%, while private business profits rose 5.4%. Profits at foreign-funded industrial enterprises fell 4.2%. In a breakdown of sectors, profits in petroleum, coal and other fuel processing shrank 53.5% in the first nine months of this year compared to a year ago, while profits in the ferrous metal processing industry dropped 41.8%. Car manufacturing profits dropped 16.6%, and profits in the textile industry fell 4.3%, according to the National Bureau of Statistics (NBS).