China’s President Xi Jinping aims to use pork-chop diplomacy to end the trade war with the United States.
In another dramatic twist on Thursday, the Chinese Ministry of Commerce announced it was “making inquiries” about buying American farm products ahead of high-level talks in Washington next month.
Included in the big-ticket items would be pork and soybeans, according to the ministry.
“Chinese companies have started making inquiries on the procurement of US agricultural products,” Gao Feng, a spokesman for the Ministry of Commerce, told a media briefing, making it clear that pork and soybeans were on the menu.
To put this into context, pork prices in China surged by 46.7% last month on the back of an African swine fever epidemic in the world’s second-largest economy.
The year-on-year jump illustrated the depth of the problem after millions of pigs were slaughtered or died from the outbreak.
Data from the National Bureau of Statistics showed that the cost of food in the official Consumer Price Index, or CPI, jumped by 10% in August compared to the same period in 2018.
Significantly, that was the highest level in more than seven years.
“Consumer price inflation should accelerate in the coming months as pig stocks continue to fall,” Julian Evans-Pritchard and Martin Rasmussen, economists with Capital Economics, wrote in a note, earlier this week.
Still, this move by Beijing is the latest in a flurry of goodwill gestures from both sides in the year-long trade dispute.
It also comes a day after US President Donald Trump said he would delay a planned hike in tariffs on Chinese imports worth US$250 billion until October 15.
“We have agreed, as a gesture of goodwill, to move the increased Tariffs on 250 Billion Dollars worth of goods [25% to 30%] from October 1st to October 15th,” Trump tweeted on Wednesday evening.
“[The delay was requested by] Vice-Premier of China, Liu He, and due to the fact that the People’s Republic of China will be celebrating their 70th Anniversary,” he added.
Beijing had earlier announced a list of items that would be exempt from its own planned levies, but which did not include significant imports such as pork. That has now changed.
“I hope that the two sides will continue to take practical actions to create favorable conditions for consultations, which will benefit both China and the United States,” spokesman Feng said.
In the past 12 months, American farmers have born the brunt of the trade spat, especially after soy exports collapsed, virtually wiping out foreign markets farmers had spent years cultivating. Trump has offered billions in aid to farms badly damaged in the trade conflict.
At least these signs of easing tensions have fuelled hopes of a breakthrough in high-level negotiations in Washington next month and given Asian markets a shot in the arm.
“[The delay] shows Trump doesn’t want to increase tariffs before the trade talks in early October and it creates good conditions,” Tommy Xie, an economist at Oversea-Chinese Banking Corp, said.
“It adds to the hope that there’ll be good news from the October meeting, and markets will wait and see.”
The developments were broadly welcomed in early trading although Asian markets struggled to hold on to initial rallies.
At the close, Tokyo ended 0.8% higher along with Shanghai. Sydney climbed 0.3% while Mumbai and Taipei posted modest gains.
But Hong Kong dipped 0.3% while Singapore, Wellington, Jakarta and Manila were also down.
“Just as the presidential tweet on tariffs … has injected more momentum into stocks and most likely emerging-market assets, what one hand gives the other can take away,” Jeffrey Halley, senior market analyst at OANDA, the international forex group, said in a note.
“We are only one social media posting away from a thoroughly unpredictable president turning sentiment on its head,” he added.
– additional reporting by AFP