South China Sea: US Navy angers Beijing with first FONOP of 2019

South China Sea: US Navy angers Beijing with first FONOP of 2019

USA commerce secretary Wilbur Ross predicted that the U.S. and Chinaare likely to reach a trade deal, as officials from both nations met for face-to-face talks in Beijingon Monday (New York time).

"I think there's a very good chance that we will get a reasonable settlement that China can live with, that we can live with and that addresses all of the key issues", Ross said in an interview with CNBC. USS McCampbell, the destroyer, carried out a new freedom of navigation operation, sailing within 12 nautical miles of islands in the Paracel Islands group in the South China Sea in what the U.S. Pacific Fleet said was an operation to "to challenge excessive maritime claims".

U.S. Undersecretary for Trade and Foreign Agricultural Affairs Ted McKinney, center, who is part of U.S. trade delegation leaves from a hotel for a second day of meetings with Chinese officials in Beijing, China, Tuesday, Jan. 8, 2019.

"China would need to significantly recalibrate its industrial policies to fully meet the USA trade team's demands", Nick Marro of the Economist Intelligence Unit said in a report.

The U.S. delegation - which is being led by Deputy Trade Representative Jeffrey Gerrish - is requesting China be specific on what U.S. products it will buy and on what specific dates.

US farmers and global seed companies have long complained about Beijing's slow and unpredictable process for approving GM crops for import, stoking trade tensions between the two sides.

The two countries have until March 1 before USA tariffs on some US$200 billion in Chinese goods are set to rise to 25 per cent from 10 per cent.

U.S. President Donald Trump, in a post on Twitter from Washington on Tuesday, reiterated his recent statement that the talk with China were going well but gave no other details.

"The mood was. boosted by signs of further progress in trade talks between the U.S. and China", ANZ bank said on Wednesday.

Optimistic investors are placing their bets on the stock market once again, boosted by the United States' and China's latest attempt to resolve their trade war.

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It was unclear if the ruckus over the warship might disrupt the working level talks being held at the Chinese Commerce Ministry.

Trump has imposed tariffs to pressure Beijing to change its practices on issues ranging from corporate espionage to market access and industrial subsidies. The US and China have been locked in an escalating trade spat since early 2018, raising import tariffs on each other's goods.

But a USA government official told AFP on condition of anonymity that "the trade talks have continued today (Wednesday)", without providing more information. "China's development has ample tenacity and huge potential", Lu said. Both Taiwan and Vietnam also claim the Paracel Islands, and the US has contended that its ships passed through only global waters, which Chinese officials refuted.

Official U.S. fuel storage data from the Energy Information Administration (EIA) is due at 1800 GMT on Wednesday.

The progress on trade negotiations follow a long back-and forth between the White House and Beijing.

"From the beginning we have believed that China U.S. trade friction is not a positive situation for either country or the world economy", Lu said.

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