China has offered to reduce its annual trade surplus with the U.S. by $200 billion (RMB 1273 billion), White House officials say, conceding one of the Trump team's key demands of recent trade negotiations. The Chinese delegation, led by Chinese Vice Premier and chief economic adviser Liu He, made the proposal during talks in Washington on Thursday afternoon. The U.S. has yet to make an official response, says Bloomberg.
A $200 billion surplus reduction was one of the U.S.'s conditions put forward during a visit of trade officials to Beijing earlier this month. Other conditions included a halt to government-backing of high-tech industries linked with the Made in China 2025 initiative. It may be expected following this gesture that the U.S. will make concessions of their own. Amongst China's list of demands were fair treatment of Chinese investment in the U.S. and ‘market economy' status at the WTO.
The yuan could weaken on the news given expectations for a deterioration of China’s balance of payments, while Chinese government bond yields may come under downward pressure, said Dariusz Kowalczyk, senior emerging-market strategist at Credit Agricole SA in Hong Kong. The news produced little immediate reaction in Asian markets early Friday May 18th. Japanese and Korean shares rose, Chinese and Hong Kong equities fluctuated while Australian stocks declined.