Chinese officials are rushing to finalize new regulations by May that will allow foreign financial groups to take majority stakes in securities companies as they seek to avert a looming trade war with the US. According to people briefed on the discussions, Beijing has also offered to buy more semiconductors from the US by diverting some purchases from South Korean and Taiwan manufacturers, in an effort to help reduce annual $375bn merchandise trade surplus with the US.
Last week US President Donald Trump threatened to impose tariffs of up to 25 percent $60bn of Chinese industrial exports, in retaliation for allegedly “forcing” foreign companies to transfer technology and other intellectual property in mandated joint ventures. Beijing subsequently outlined its
response to Mr Trump’s earlier threat to impose tariffs on $3bn of Chinese steel exports. The counter-move was intended as a warning that Beijing would respond in kind if Mr Trump proceeded with the much larger action against industrial exports. The discussions to avert a tit-for-tat trade war are being led by Liu He, China’s vice- premier and President Xi Jinping’s most trusted economic adviser, and US Treasury secretary Steven Mnuchin. On Saturday, China’s official Xinhua news agency said that Mr Liu told Mr Mnuchin during a phone call that the US actions were in violation of global trade rules and warned him that Beijing was prepared to defend its interests. The US Treasury confirmed the call on Sunday, saying that the two men had discussed “mutually agreeable” ways to cut America’s trade deficit with China.