Trade war: China pledges to open market, to 'buy semicounductors' from US

Chinese Premier Li Keqiang said on Monday his country and the United States should maintain negotiations and he reiterated pledges to ease access for American businesses.

Li told a conference that China would treat foreign and domestic firms equally, would not force foreign firms to transfer technology and would strengthen intellectual property rights, repeating promises that have failed to placate Washington.

The United States asked China in a letter last week to cut a tariff on US autos, buy more US-made semiconductors and give US firms greater access to the Chinese financial sector, the Wall Street Journal reported on Monday, citing unidentified sources.

On the other hand, the Financial Times in a source-based report stated China has offered to buy more semiconductors from the US by diverting some purchases from South Korea and Taiwan, to help cut China’s trade surplus with the US.

Alarm over a possible trade war between the world’s two largest economies has chilled financial markets as investors anticipated dire consequences should trade barriers go up due to President Donald Trump's bid to cut the US deficit with China.

According to the WSJ, US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer listed steps they want China to take in a letter to Liu He, a newly appointed vice premier who oversees China's economy. The newspaper reported that Mnuchin was considering a visit to Beijing to pursue negotiations.

Despite a steady stream of fierce rhetoric from Chinese state media lambasting the United States for being a “bully” and warning of retaliation, Chinese and US officials are busy negotiating behind the scenes.