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China upbeat about trade talks, but Hong Kong policy might cause complications

China’s leaders told a U.S. business delegation they still have a positive attitude towards trade talks.  Chinese President Xi Jinping told participants in Bloomberg’s New Economy Forum Friday his country doesn’t want to start a trade war but they are not afraid and would fight back when necessary.

The delegation included former Secretary of State Henry Kissinger, former Treasury Secretary Hank Paulson, and former U.S. Trade Representative Mike Froman.

Another possible obstacle to a U.S. China trade agreement is the Hong Kong Human Rights and Democracy Act, which awaits President Trump’s signature.  Chinese media reports The Hong Kong issue has the potential to influence the trade talks, and China will have to respond if Trump signs it into law.

Progress on signing the Phase One trade deal is uncertain, as it remains unclear if China will buy large quantities of ag products and if the U.S. is willing to start cutting tariffs.

China’s Vice Premier has invited U.S. negotiators to Beijing for more talks next week, but no meeting date has been announced.