BEIJING (AFP) - China's top trade negotiator and Vice-Premier Liu He, a Harvard-educated economist, is putting his reformer credentials to the test in months of fraught negotiations with American officials. President Xi Jinping's right-hand man on economic issues has managed months of tricky negotiations with US officials in an attempt to hammer out a pact. On his current trip, Beijing described him as the "leader in charge of the China-US comprehensive economic dialogue" - a change from his title of Mr Xi's "special envoy" on his last trip to Washington. The omission could allow Mr Xi to avoid having his name tied to any failure in the talks. His task was made harder on Friday (May 10) when the US once again raised tariffs on a large portion of the goods China ships across the Pacific, reigniting tensions that Mr Liu had worked hard to dampen. Mr Liu admitted he was "under pressure" as he arrived for the talks in Washington on Thursday. "Under the current circumstances, raising tariffs is not a good way to resolve the problems, it is harmful to China, harmful to the US, and harmful to the world," Mr Liu said. Related Story China expresses regret over US tariff hike, vows countermeasures The long-winded negotiations have been rocky from the start. Last spring, Treasury Secretary Steven Mnuchin and Mr Liu thought they had struck a deal, with Mr Liu saying they had reached a "consensus" and there would not be a trade war or new tariffs. Weeks later, US President Donald Trump moved ahead with new tariffs - eventually hitting US$250 billion (S$340.60 billion) worth of imports from China - leading many observers to say it damaged Mr Liu's political standing. Beijing fired back with tariffs on most US imports. Mr Liu is "intelligent and diligent and throws himself into his work", said Dr He Liping of Beijing Normal University, who collaborated with Mr Liu for nearly 20 years as a member of the Chinese Economists 50 Forum, a think-tank of liberal economists. The negotiations have carried on for 11 rounds of high-level face-to-face talks, with the 67-year-old Mr Liu and his American counterparts following up on video calls. Chinese Commerce Minister Zhong Shan described the talks as "very difficult and taxing" with both sides working "day and night". But this week, Mr Trump accused Beijing of backtracking on already-agreed commitments. Washington wants far-reaching changes to the Chinese economy, such as subjecting state-owned enterprises (SOEs) to market principles and reducing their massive subsidies. While Mr Liu has indicated he favours such reforms, he likely faces deep resistance from entrenched interests in Beijing. "Executives at state-owned enterprises are officials. Today you're manager of a central SOE, next year you're vice-governor of Shandong province," explained economist Sheng Hong. "SOEs are their interests, they can move to one and make lots of money. Why would they want reform?" KEYNES ADMIRER Dr He Liping described Liu as a "liberal economist". "I've heard him bring up Joseph Alois Schumpeter, Walt Whitman Rostow, John Maynard Keynes many times and I believe he admires them," said Dr He. Schumpeter is best known for his theory of "creative destruction" and defence of capitalism for fostering entrepreneurship and innovation, Rostow for developing a model of economic growth, and Keynes for ideas about a proactive role of government in supporting the economy. In the 1990s, Mr Liu was a visiting scholar at Seton Hall University in the US and subsequently earned a master's degree from Harvard's Kennedy School. A former Harvard classmate remembered Mr Liu as "a fairly quiet, self-contained, hard-working student". "Clearly, he enjoys the trust of General Secretary Xi," China expert Tony Saich of Harvard's Kennedy School said last year. "Personal relations and trust are very important in Chinese politics," he said. PUSHING REFORMS In May last year, after he thought he had a deal to avoid tariff hikes, Mr Liu said "using opening up to push reform and development is a very important strategy for us". Mr Sheng Hong, a fellow member of the Chinese Economists 50 Forum, said Mr Liu meant that external forces like the trade war can be used to push domestic reforms. "He is a liberal economist, but he's in the government, so he is not outspoken like us," Mr Sheng said. US Trade Representative Lighthizer initially agreed. "I think you have to start with the proposition that there are people in China who believe that reform is a good idea. And you have to believe that those people are at a very senior level," Mr Lighthizer said to National Public Radio this spring, in an apparent reference to Mr Liu. Dr He Liping said Mr Liu would be able to get a deal, noting "he has always been politically minded".<doc-sep>‘Under Pressure,’ Vice Premier Liu He Arrives in Washington for Trade Talks By Zhang Qi and Zhao Runhua / May 10, 2019 11:21 AM / World “I came to Washington with sincerity,” Chinese Vice Premier Liu He told reporters after he arrived in the U.S. Thursday for yet another round of trade talks, state-run CCTV reported. Liu said he hoped to “engage in rational and candid exchanges with the U.S. side” under such “special circumstances.” Earlier this week, U.S. President Donald Trump threatened to raise tariffs on $200 billion of annual Chinese imports to 25% from 10%. U.S. Trade Representative Robert Lighthizer Wednesday confirmed the tariff increase would begin Friday morning U.S. time. The vice premier admitting that his delegation’s trip to the U.S. is “under pressure,” said China is showing the “greatest” sincerity to solve related problems with the "best solutions." Liu said the two economies are in one “industrial chain” that involve each other, and lifting tariffs on China will be harmful to both sides. Liu had a working dinner with Lighthizer and Treasury Secretary Steven Mnuchin, and will continue related talks Friday morning, the White House said. Related: China Rejects U.S. ‘Backtracking’ Charge and Urges Dialogue in Trade Dispute<doc-sep>Source: Xinhua| 2019-05-10 06:09:58|Editor: Liangyu Video Player Close Chinese Vice Premier Liu He receives an interview in Washington D.C., the United States, May 9, 2019. Liu He, a member of the Political Bureau of the Communist Party of China Central Committee and chief of the Chinese side of the China-U.S. comprehensive economic dialogue, arrived in Washington D.C. on Thursday for the 11th round of high-level economic and trade consultations with the U.S. side. (Xinhua/Liu Jie) WASHINGTON, May 9 (Xinhua) -- Chinese Vice Premier Liu He arrived in Washington on Thursday for the 11th round of high-level economic and trade consultations with the U.S. side. Liu told reporters upon his arrival that he came to Washington with sincerity, saying that under the current special circumstances he hopes to engage in rational and candid exchanges with the U.S. side. Liu is also a member of the Political Bureau of the Communist Party of China Central Committee and chief of the Chinese side of the China-U.S. comprehensive economic dialogue. China believes that raising tariffs is not a solution to the problems, Liu said, noting that it is harmful to China, to the United States and to the whole world.<doc-sep>
Chinese Vice Premier Liu He will head to the U.S. this week for the next round of trade talks, the government announced Tuesday. Starting Thursday, Liu will pay a two-day visit to the country at the invitation of U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, the Ministry of Commerce said in a statement (link in Chinese). The announcement immediately sent China stocks higher, with the benchmark Shanghai Composite Index closing up 0.69% at 2,926.39. Chinese stocks plunged 5.58% on Monday after U.S. President Donald Trump tweeted over the weekend that he would increase additional tariffs on $200 billion worth of Chinese goods to 25% on Friday — up from the current 10%. Trump criticized the bilateral negotiations to resolve the trade dispute for moving “too slowly” and threatened to subject another $325 billion worth of products to a similar punitive rate. Shares initially bounced back slightly on Tuesday before sinking into negative territory in the afternoon on more pessimism. But they rallied in the last 40 minutes of trading following the announcement of Liu’s visit. The market had been closely watching China’s response to Trump’s statement. In particular, observers were paying close attention to whether Beijing would scrap Liu’s visit to the U.S. “If Liu He goes to the US according to the original plan, it implies that … a deal will happen soon,” Larry Hu and Irene Wu of consulting firm Macquarie Capital Ltd. said in a note on Monday. “If China only sends a junior team to the US, the market might have to wait longer to see who blinks first.” Prior to the Ministry of Commerce’s announcement, Geng Shuang, a spokesperson of the Ministry of Foreign Affairs, said on Monday that Chinese negotiators were still preparing to head to the U.S., without specifying whether Liu would go. Yang Ge contributed to this report. Contact reporter Fran Wang (fangwang@caixin.com)