As Beijing tries to convince Washington to lift all of the trade war-inspired tariffs on Chinese goods as part of a sweeping trade accord, it has offered two concessions on Monday as trade czar Liu He heads to the US for another round of talks. China is reportedly planning to extend a suspension of retaliatory auto tariffs imposed last year during the trade debacle, and reiterating a promise made by President Xi’s during his meeting with Trump in Buenos Aires late last year to tighten controls of the deadly synthetic opioid fentanyl.
Though neither of the purported concessions are anything new, Beijing is hoping they will help foster a “positive atmosphere” for talks this week. Beijing initially scrapped the 25% tariff on vehicles as a tit-for-tat measure on Jan. 1, after the White House delayed a planned tariff increase from 10% to 25% on $200 billion of Chinese goods, per BBG.
Beginning on May 1, Beijing said it will change the categorization of fentanyl to make it more difficult to export, as both sides try to keep the momentum going as trade talks enter their final stretch.
Chinese officials also pledged to tighten regulation on fentanyl from next month, a promise President Xi Jinping already made to President Donald Trump at a December meeting in Argentina. The inclusion of the drug as a controlled substance in a category of non-medicinal narcotic drugs and psychotropic substances will start May 1, according to the China National Narcotics Control Commission.
The moves signal China is trying to keep momentum in trade talks going as they enter what could be the final stretch before Trump and Xi are presented with a text to finalize or sign. Beijing is determined to prevent an escalation of the frictions that have hurt its economy and roiled markets, even as enforcement measures remain a sticking point in negotiations.
China also promised to crack down on criminal networks responsible for trafficking fentanyl. American law enforcement agencies have blamed these networks for causing the surge in opioid overdose deaths in recent years, as fentanyl is increasingly used to lace heroin sold on the street.
However, Chinese officials refused to accept responsibility for the crisis, saying it was largely “self-created” and can’t be blamed on China.
In addition to putting fentanyl on the controlled substance list, China said it will crack down on underground networks who sell the drug online and ship them to the U.S by disrupting their cyber communication channels and stepping up checks on private packages at its customs borders. The synthetic opioid is sold by online distributors across China and is blamed for thousands of overdose deaths in the U.S.
Chinese officials also emphasized that the U.S. opioid crisis is largely self-created and cannot be blamed on supply from China.
China “exercised great restraint and did its very best” with the recent moves, compared with the U.S. only mulling to suspend some of its tariffs, said Li Yong, a senior fellow at the China Association of International Trade in Beijing. “Blame does not help to solve the problem. The right attitude should be to enhance cooperation and have construction communication.
One analyst said the concessions would help enhance mutual trust between the world’s two largest economies.
“What matters is not whether these are big concessions or not, but that they are a quick response to the U.S. concerns,” said Gai Xinzhe, a senior analyst at Sino Ocean Capital in Beijing. “It’s not like in the past when issues raised in bilateral dialogues dragged on without solution. This is good for enhancing mutual trust in the negotiations.”
Of course, as we’ve pointed out before, the authorities in Beijing have the unilateral ability to turn off the fentanyl tap any time they want, and the notion that they have been helpless to stop fentanyl trafficking is simply misguided. Local governments have allowed fentanyl production because it brings in badly needed tax revenue – and they are also thoroughly corrupt.
That Beijing touted these as new concessions, even though they merely represent a doubling-down of Beijing’s previous promises, suggests that reports on Friday that China is unwilling to cede any more ground to the US, and that Xi remains “wary” of a summit with Trump, should be taken seriously.
via ZeroHedge News https://ift.tt/2TQKExE Tyler Durden