U.S. Beef Is on Table Ahead of China Talks

By Josh Chin Features Dow Jones Newswires

Ahead of a high-level U.S.-China security meeting in Washington, Beijing is doing its utmost to show why close trade links with China are a good thing for America, and starting with Iowa beef.

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Chinese and U.S. officials are set to kick off an annual security dialogue on Wednesday that will address an impasse over North Korea's missile development and nuclear program.

On the same day, the first shipment of American beef in 14 years is scheduled to arrive in Shanghai, following a breakthrough in trade relations. Members of a recent Chinese delegation to the U.S. pointed to this and other moves as a relative bright spot in a fraught relationship.

"The next step is to import a huge volume of agricultural goods," Wei Jianguo, a former Chinese trade official, said in Beijing on Monday, flagging how he said the swelling appetites of Chinese consumers could benefit the U.S. "Ignoring a market this big, how is that going to solve the U.S.'s problems?"

Mr. Wei just returned from a trade-focused trip with other current and former government officials to New York City and Des Moines, Iowa. He brought home an upbeat message on the progress of a U.S.-China 100-day plan to reduce trade friction.

The security dialogue that is opening with a high-level meeting in Washington on Wednesday was proposed by Presidents Donald Trump and Xi Jinping earlier this year. Secretary of State Rex Tillerson, who will run Wednesday's one-day meeting alongside Chinese State Councilor Yang Jiechi, has said the U.S. intends to focus on limiting North Korea's nuclear program.

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Washington and Beijing have hit an impasse over North Korea, which has pushed forward with its nuclear-weapons and missile program despite U.N. sanctions. Chinese officials say they are doing everything they can under existing sanctions to pressure Pyongyang. U.S. officials say China, as North Korea's lone major ally, can do more.

Trade, by contrast, has seen some progress. Aside from the beef deal, China also approved the import of two new varieties of genetically modified crops, expanding the market for U.S. agricultural companies.

In addition, several Chinese companies, including e-commerce giant Alibaba Group Holding Ltd., have pledged investment they say will bring new jobs to U.S. workers. Alibaba founder Jack Ma said in January that he would use his company's platform to help small and medium-size American companies gain access to the Chinese market, pledging to create one million jobs in the process.

Mr. Ma plans to try to sell that vision at a conference in Detroit this week. The billionaire's keynote speech is scheduled to coincide with Wednesday's meeting in Washington.

"I think he will be successful. I hope he's successful, because it's in the interests of both sides," said Mr. Wei, who is now a senior figure at a state-supported think tank. He predicted Alibaba would help promote development of the U.S. logistics industry in addition to adding jobs in retail.

Officials who traveled with Mr. Wei had positive words for Mr. Trump, who had threatened a trade war with China over its currency and other issues.

"His attitudes on China have changed a lot," said Zhao Qizheng, former head of the information office of China's State Council, speaking at a press briefing with Mr. Wei and other officials.

For China, challenges to the trade relationship remain, Mr. Wei said. He pointed to U.S. rules barring the export to China of high-tech products with potential military applications, and U.S. security reviews that have restricted Chinese investment in sensitive U.S. industries.

He also acknowledged frustrations among U.S. companies with China's own foreign-investment restrictions in certain areas. Foreign trade groups have complained about obstacles to entry in information technology, finance and other sectors.

Mr. Wei said he saw no risk of a U.S.-China trade war in the coming year. Officials at the press briefing on Monday, suggesting Washington doesn't have the stomach for such a conflict, ticked off billions of dollars in exports to China by U.S. aircraft makers, farmers and other businesses every year.

"Who will lose in a war?" asked Mr. Wei.

Write to Josh Chin at josh.chin@wsj.com

(END) Dow Jones Newswires

June 19, 2017 12:32 ET (16:32 GMT)