Last week, the United States and China concluded another round of trade talks to resolve their trade issues. From the beginning, the United States has made it clear that talks with China are focused on several structural issues and not merely the mechanism to lower the massive trade deficit.
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However, China’s statements show that the country has previously attached importance to trade issues. In December, China said that the talks focused “on economic and trade issues, exchanging ideas on problems of both sides’ concerns.”
In January, China said the two sides discussed “structural problems of mutual concerns.” The statement went a bit further in February, and China said the two sides “had in-depth discussion on topics of mutual concerns including technology transfer, intellectual property rights protection, non-tariff barriers, the service industry, agriculture, trade balance and implementation mechanism.”
To be sure, these are the seven key points that the United States has highlighted from the very beginning. Now, after last week’s talks, China said that “the two sides discussed the agreement text” on these seven points. The statements indicate that the two sides seem to be making progress to resolve their trade spat.
Meanwhile, optimism over US-China trade talks is among the factors that have fueled a stock market rally (SPY). Apple (AAPL), NVIDIA (NVDA), Advanced Micro Devices (AMD), Micron (MU), and Broadcom (AVGO) have risen 25.4%, 43.2%, 57.0%, 36.5%, and 20.7% YTD, respectively, based on their April 5 closing prices. Alibaba (BABA), JD.com (JD), and Baidu (BIDU) have risen 35.2%, 49.3%, and 14.5%, respectively, in the period.