US and Chinese officials will hold trade talks in Beijing this week, as they aim to build on progress made in Washington last month (FRED DUFOUR)

Beijing (AFP) – US and Chinese negotiators are set to kick off two days of official trade talks in Beijing Thursday as the world’s top two economies try to patch up their festering economic dispute. 

Pressure to seal an accord ahead of a March deadline lessened before the talks as US President Donald Trump indicated Tuesday in Washington he was open to extending a trade truce, depending on progress in Beijing.

Trump in December put on hold sharp tariff hikes on $200 billion of Chinese imports to allow time for negotiators to work out a resolution to the thorny spat.

The two countries have already slapped tariffs on more than $360 billion in two-way trade, which has weighed on their manufacturing sectors and shaken global financial markets.

US officials including US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will meet with China’s top economic czar Liu He and central bank governor Yi Gang as the two sides aim to build on progress made in Washington last month.

Lower level officials arrived earlier for what the White House called preparatory meetings starting Monday.

Expectations for a trade deal have grown as China faces pressure from slowing economic growth and swooning global markets rattle Trump and his economic advisors.

Chinese President Xi Jinping plans to meet with top US officials in Beijing this week, a report in the South China Morning Post said Wednesday, bolstering hopes for the talks and markets in Asia. 

Trump also said he expects to meet with Xi “at some point” to clinch a trade deal.

“Markets will continue to watch –- and react -– closely to the ups and downs of the negotiations,” said Trey McArver of Trivium Research.

“But Sino-US relations are all about the two leaders, and it will ultimately be up to Xi and Trump to come to a deal -– or not,” he wrote Wednesday in a newsletter.

The two sides said major progress was made in talks last month in Washington, but a wide gulf remains on some issues.

The US is demanding far-reaching changes to Chinese practises that it says are unfair, including theft of US technology and intellectual property, and myriad barriers that foreign companies face in the Chinese domestic market.

Beijing has offered to boost its purchases of US goods but is widely expected to resist calls for major changes to its industrial policies such as slashing government subsidies.

The International Monetary Fund warned on Sunday of a possible global economic “storm” as world growth forecasts dip, citing the US-China trade row as a key pivot point.

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