The Chinese stock market welcomes new positive news.
(The Wall Street Journal) cited informed sources that the Chinese side will travel to Washington this week for a new round of trade talks with U.S. trade and Treasury officials and will communicate with representatives of the U.S. business community.
Some details:
The meeting is scheduled to take place in Washington, rather than a neutral 'third country', indicating both sides' willingness to release signals of easing tensions. The next meeting may be the U.S. side visiting Beijing.
The Chinese side will meet with the deputy of U.S. Trade Representative Katherine Tai and officials from the U.S. Treasury Department—there are no arrangements for contact with the U.S. Department of Commerce (which is responsible for export restrictions and technology bans), focusing instead on the Trade Representative's office and the Treasury Department. This conveys that, at least for now, the topics are concentrated on economic and trade issues, without touching the most contentious tech war.
This meeting may discuss soybean procurement, but before committing to purchases, the Chinese side requires the U.S. to lift the 20% tariffs related to fentanyl trade—China is 'trading the cancellation of fentanyl-related tariffs for procurement commitments', essentially shifting the negotiation focus to a 'low-sensitivity zone' where both sides can compromise. This does not resolve the fundamental contradictions but is conducive to forming a positive cycle.
Due to the low market expectations for this meeting, even symbolic achievements will be seen as important good news.
China's stock market opened lower today but then 'turned red', while Monday's trading volume surged to the second highest level on record (indicating that 'existing funds are shifting to 'new funds entering the market'), further confirming the sustainability of this round of increases.
