Markets

China says Xi-Trump phone call ‘extremely positive’

China says Xi-Trump phone call ‘extremely positive’

Hong Kong's Hang Seng jumped 2.6%, China's Shanghai Composite rose 2.4%, Japan's Nikkei gained 1.2% and South Korea's Kopsi rose 3.5%. Kudlow added though that no trade plan has been developed by United States officials for China so far.

"This is pre-election hype created to make the markets happy; there is no imminent deal with China", Greg Valliere, the chief global strategist at Horizon Investments, told Business Insider.

The leaders of the world's two largest economies made the remarks after their first publicly disclosed telephone conversation in nearly six months.

"The two countries' trade teams should strengthen contact and conduct consultations on issues of concern to both sides, and promote a plan that both can accept to reach a consensus on the China-US trade issue", Xi told CCTV state television.

The news agency said it was not clear if Trump was easing up on demands that China has resisted, and it cited one person as saying intellectual property theft was a sticking point on a possible deal.

Trump has also threatened to impose tariffs on all remaining goods imports from China, which a year ago were worth US$505 billion.

The US leader wants to maintain United Nations sanctions and pressure to compel Pyongyang to abandon its nuclear program, even as he prepares for a second summit with North Korean leader Kim Jong Un.

Analysts were mixed on the significance of Trump's latest move, with some viewing it as a positive sign of a breakthrough and others seeing it as a ploy to boost market sentiment ahead of midterm elections next week.

However, a senior Trump administration official on dismissed the report as untrue, a CNBC reporter said in a post on Twitter.




Still, investors cheered the resumption of dialog and a report that Trump was taking steps to resolve the tariff war, with shares in Asia hitting three-week highs on Friday and the dollar softening.

White House economic adviser Larry Kudlow said the administration wasn't making any unusual preparations for the G-20 meeting in an interview with CNBC Friday afternoon. But Kudlow cautioned that Trump would "aggressively" pursue his agenda against China, if no deals were reached on intellectual property theft, cybersecurity and tariffs on commodities, among other issues.

Trump warned that if China doesn't "treat us fairly, we're not going to treat them fairly" in remarks at an event for American workers at the White House.

The United States has already imposed tariffs on $250 billion worth of Chinese goods, and China has responded with retaliatory duties on $110 billion worth of US goods.

Trump administration officials have said that trade talks with China can not resume until it comes up with specific actions it is willing take to meet USA demands for sweeping changes to policies on technology transfers, industrial subsidies and market access.

Despite the promise offered by the Trump-Xi telephone call, the level of tension between the two nations was demonstrated just hours after it ended when the United States filed charges against Chinese technology firm Fujian Jinhua Integrated Circuit Co and its Taiwanese partner.

"The issues driving the China-US trade tensions are complicated and contentious, which makes it incredibly hard to believe that substantive progress was made during this phone call", Boltansky said.

Xi on Thursday said he looks forward to meeting with Trump in Argentina and hopes the two sides build stable relations, according to China's state media.

"We will see what happens at the G20 and with Liu's talks, but I am not optimistic that anything momentous will come out of this", Zimmerman said.


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