Hong Kong
Cnn
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A new series of commercial negotiations between the United States and China began in London, the two parties trying to preserve a fragile truce negotiated last month.
The new talks have been announced last week After a long -awaited telephone call between US President Donald Trump and Chinese chief Xi Jinping, who seemed to mitigate the tensions that broke out in the past month after a Surprise agreement in Geneva.
In May, the two parties agreed to radically make prices back on the goods of the other for an initial period of 90 days. The atmosphere was optimistic. However, the feeling quickly happened on two main bonding points: control of China on so-called rare minerals and its access to semiconductor technology from the United States.
Exports of rare earth from Beijing and their related magnets should occupy the front of the stage on Monday during the London meeting. A person familiar with the case told CNN that American-Chinese discussions were underway. The official China Xinhua news agency also reported the start of discussions.
Experts say Beijing is unusual to abandon Its strategic grip on essential minerals, which are necessary in a wide range of electronics, vehicles and defense systems.
“China’s control over rare land supply has become a calibrated but assertive tool for strategic influence,” wrote Robin Xing, chief economist of Morgan Stanley, in a research note on Monday. “Its quasi-monopoly of the supply chain means that rare land will remain a major negotiation program in commercial negotiations.”
Since the talks in Geneva, Trump has accused Beijing of effectively blocking the export of rare earths, of announcing additional flea borders and of threatening to revoke the American visas of Chinese students. The movements have caused reactions to China, which consider Washington’s decisions as a redeection on its commercial promises.
All eyes will be on the question whether the two parties can reach a consensus in London on questions of fundamental importance. US Secretary of the Treasury Scott Bessent, the secretary of trade Howard Lunick and the trade representative Jamieson Greer will meet a Chinese delegation led by Deputy Prime Minister He Lifeng.
On Saturday, Beijing seemed to send reconciliation signals. A spokesperson for the Chinese trade ministry, who oversees export controls, said He had “approved a number of compliant requests”.
“China is willing to further improve communication and dialogue with the countries concerned about export controls to facilitate compliant trade,” said the spokesperson.
Kevin Hassett, head of the National Economic Council of the White House, said The face of CBS is the face of the nation on Sunday that the American team would seek to restore the flow of minerals of rare land.
“These exports of critical minerals were released at a higher pace than it was, but not as high as we think we accepted in Geneva,” he said, adding that he was “very comfortable” with a trade agreement after the discussions.
Monday morning, in an interview with CNBC, Hassett said: “It was a very important bonding point, because China controls … Something like 90% of rare earths and magnets. And if they rolled slowly, send them to us because of certain license agreements.”
“And there are enough, for example, the automotive companies, that President Trump took it very seriously, called President XI and said that we were able to make this kind of thing come out faster. And President XI accepted,” he added.
In April, while the trade tension of the Tit-For-Tat between the two countries has intensified, China has imposed a new license regime on seven rare earth minerals and several magnets, forcing exporters to request approvals for each sending and to submit documentation to verify the planned final use of these documents.
After the commercial truce negotiated in Geneva, the Trump administration expected China to raise restrictions on these minerals. But the apparent appearance of Beijing approvals sparked deep frustration in the White House, CNN reported last month.
Rare earths are a group of 17 elements that are more abundant than gold and can be found in many countries, including the United States. But they are difficult, expensive and polluting for the environment to extract and treat. China controls 90% of global treatment for rare earths.
Experts say that it is possible that Beijing can seek to use its lever effect on rare earths to bring Washington to facilitate its own export controls aimed at blocking China access to advanced American semiconductors and related technologies.
The American Chamber of Commerce in China said on Friday that some Chinese suppliers of US companies received Six -month export license. Reuters also indicated that suppliers of large American car manufacturers – including General Motors, Ford and Jeep -Maker Stellantis – have obtained temporary export licenses for a period of up to six months.
Although China can intensify the pace of license approvals to cool diplomatic temperature, global access to Chinese minerals in rare earths will probably remain more restricted than before April, according to a Friday research note by Leah Fahy, economist in China and other capital Economics experts, advice based in London.
“Beijing had become more assertive in its use of export controls as tools to protect and cement its global position in the strategic sectors, even before Trump was rates from China this year,” said the note.
While China tackles a tariff war with the United States on the front, it is clear that disturbances continue to cause economic pain at home. Trade data and prices published Monday painted a dark image for the country’s export economy.
Its global shipments abroad increased by only 4.8% in May, compared to the same month a year earlier, according to data published by the general customs administration by China. It was a net slowdown in the 8.1% recorded In April, and below the estimate of export growth of 5.0% of a reuters survey of economists.
Its exports to the United States underwent a sharp drop of 34.5%. The strong monthly fall extended by a drop of 21% in April and came despite the commercial truce announced on May 12 which lowered the American prices on Chinese products from 145% to 30%.
However, Lü Daliang, spokesperson for the customs department, discussed China’s economic force, saying to the media managed by the state Xinhua China’s goods trade has demonstrated “resilience in the face of external challenges”.
Meanwhile, deflationary pressures continue to track down the second world economy, according to data published separately on Monday by the National Bureau of Statistics (NBS). In May, China Consumer price index (CPI), a reference to measure inflation, dropped by 0.1% compared to the same month of last year.
Factory deflation, measured by the Producer price index (PPI), aggravated with a decrease of 3.3% in May compared to the previous year. The drop in last month marks the strongest contraction in annual sliding in 22 months, according to NBS data.
Dong Lijuan, chief statistician of the NBS, awarded the drop in producers’ prices, which measures the average variation in prices received by producers of goods and services to a drop in world oil and gas prices, as well as the drop in coal prices and other raw materials due to low cyclic demand. The high base of last year was cited as another reason for the decline, Dong said in a statement.