By Chao Deng
BEIJING--China offered its most positive message in recent weeks that trade talks with the U.S. are going smoothly after a phone call Tuesday between the countries' top negotiators, raising the prospects for a limited deal.
China's Commerce Ministry said the two sides had "reached a consensus on properly resolving related issues." The message, though short and formulaic, followed a phone call between China's chief trade negotiator, Liu He, and his U.S. counterparts, Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
The upbeat language comes after the Chinese Communist Party's top policy-making body and the state's cabinet over the weekend issued guidelines for stronger protection of intellectual-property rights, a core concern for Washington in the long-running trade dispute.
"I think China is eager to get a deal done," said Jingzhou Tao, a Beijing-based lawyer for Dechert LLP who advises multinationals on business in China and has been following the trade talks. "They cannot afford to have this uncertainty overshadow their economy."
Beijing and Washington are seeking an interim trade agreement that would, at minimum, put a hold on U.S. tariff increases while China gives some assurance that its state companies will buy more U.S. farm products.
China wants to demonstrate that both sides are communicating frequently, even after President Trump last week connected his strategy on the pro-democracy protests in Hong Kong to the talks. Beijing has tried to keep the negotiations focused strictly on trade, and it views Hong Kong as an internal matter.
U.S. trade negotiators haven't said publicly whether they have accepted China's invitation for face-to-face talks in Beijing, which Mr. Liu proposed to Messrs. Lighthizer and Mnuchin earlier this month.
Mr. Liu made the call Tuesday after U.S. negotiators passed on making plans to visit this week, as hoped for by the Chinese side. The Commerce Ministry said both sides had agreed to keep in touch on remaining issues for a so-called phase-one deal, without saying what the gaps were or providing a date for any meeting. There is no indication whether Mr. Trump and Chinese President Xi Jinping will meet.
Along with intellectual-property protection, the U.S. is looking for more commitments from China on forced technology transfers and agricultural purchases. The sticking point for Beijing remains the U.S.'s reluctance to roll back tariffs on the majority of its Chinese imports. The tariffs have contributed to pressure on China's economy, which is growing at its slowest pace in decades.
Neither side wants talks to fall apart, setting off another round of escalation in a trade dispute that has dragged on for nearly two years. One fast-approaching deadline is Dec. 15, when Mr. Trump has threatened to impose punitive tariffs on roughly $156 billion worth of Chinese smartphones, laptops, toys, videogames and other products.
The U.S. had previously postponed that round of tariffs amid worries that it would hurt American businesses and consumers. U.S. businesses and investors think the Trump administration could delay the tariffs again should it think talks are making progress.
"There are no signs that Trump or Xi feels desperate enough to make large concessions," said Michael Hirson, an analyst at political-risk consulting firm Eurasia Group and a former U.S. Treasury representative in Beijing.
The Chinese side is trying particularly hard to keep talks on track. It has been updating the Chinese public more regularly, a contrast with April, when it was the U.S. trumpeting optimism for a trade deal and China that stayed reticent. Those talks collapsed at the 11th hour, which the U.S. blamed on Beijing for reneging on promises.
This time around, China has sent plenty of positive signals in addition to its warm words on Tuesday and its weekend pledge on intellectual-property protections. China lifted a four-year-old ban on U.S. poultry imports this month and has continued with a steady stream of modest purchases of American farm goods.
In its promise to bolster intellectual-property protections, Beijing set benchmarks for improvement by 2022 and 2025. But some experts, including Mr. Tao of the law firm Dechert, said the vaguely-worded guidelines offered few details on how leaders would achieve these goals.
For example, Beijing said it would increase penalties for trademark infringement and instructed local officials to implement guidelines for better protecting intellectual property, but held off on laying out how officials who don't stop violations would be held accountable.
"It's more like they're trying somewhat to meet U.S. requirements in the trade talks," Mr. Tao said.