Why US and China trade talks may offer hope for agricultural, medical and tech firms

Presence of senior Chinese officials overseeing relevant sectors could offer a clue as to potential areas of progress.

Observers highlighted the potential areas for compromise after vice-premier Liu He, the top economic aide for Chinese President Xi Jinping, arrived in the US capital on Tuesday for talks aimed at averting a trade war that will continue until Saturday.

Liu was accompanied by top Chinese officials such as central bank governor Yi Gang, deputy minister of industry and information technology Luo Wen and deputy agricultural minister Han Jun, according to the state news agency Xinhua – a sign that their respective areas of responsibility were likely to form key parts of the agenda. Neither Luo nor Han took part in an earlier round of talks with US officials in Beijing that ended with no agreement.

Although fundamental disagreements between both sides remain, China is expected to have brought “gifts” to the US this week – which may include promises to reduce the trade deficit, reduce tariffs, and expand market access, according to Du Lan from the China Institute of International Studies.

“The US delegation came [to Beijing in May] with a very high asking price, but the demands from both sides should be lower this time, as reflected by Trump’s signals about resolving the ZTE issue,” she said.

Her comments referred to the US President’s surprise tweet on Monday, in which he said he had ordered the Commerce Department to get ZTE back on its feet, after the US banned companies from working with the Chinese telecoms giant for violating sanctions on Iran.

However, subsequent tweets by the US President highlighted some of the potential sticking points as he insisted that “nothing has happened with ZTE except as it pertains to the larger trade deal”.

He also repeated his claim that US was “losing hundreds of billions of dollars a year to China”, adding that US has “little to give because we have given so much over the years. China has much to give!”.

If Trump does follow through on his initial pledge to help ZTE, Beijing may make concessions on agriculture, where the bulk of Chinese tariffs on US goods will fall, Nick Marro, an analyst with the Economist Intelligence Unit, said.

China has threatened to impose a 25 per cent tariffs on a range of American products, including soybeans, which will hit the agricultural states where support for Trump is particularly strong.

“There is obviously an awareness on the Chinese side that agriculture is a key kind of flashpoint, and it’s something that Trump obviously cares about,” Julian Evans-Pritchard, senior China economist at Capital Economics in Singapore, said.

“The Chinese might offer something in those areas, I’d imagine, to compensate for the fact that they’re not willing to offer the big changes on industrial policy that people like the US Trade Representative [Robert Lighthizer] are really pushing for.”

The presence of top economic officials in the Chinese trade delegation, such as Yi, the head of the People’s Bank of China, could also indicate a willingness to open up the financial sector.

These may include a specific timeline for liberalising foreign ownership rules in the car industry, something Xi promised last month, and approving bank applications to increase their stakes in securities.

The meeting could indicate a willingness from the Chinese side to open its technology markets to foreign firms, while maintaining Beijing’s red line of keeping Xi’s signature “Made in China 2025” initiative for to develop the domestic hi-tech sector.

“There at least seems to be willingness to give face time to the US, show that we’re listening to your concerns about market access in the information technology industry,” Marro said.

One of the attendees at the meeting with Wang was Daniel Rosen, founder of the New York-based consulting group Rhodium Group, who argued that Liu may address structural issues in the Chinese economy, such as the slow progress in reforming state enterprises and wasteful financing, during the Washington talks.

“Liu He was responsible for broad and strong criticisms of the structural problems in China’s economy in recent years,” Rosen said, adding that it was likely he was seriously engaged with his US counterparts on issues such as these.

http:// www.scmp.com/news/china/diplomacy-defence/article/2146452/why-us-and-china-trade-talks-may-offer-hope

Jerry Chun Shing Lee spy trial: China gave ex-CIA agent US$100,000 and promised to take care of him ‘for life’, US court documents say

Hong Kong-born Lee, suspected of being at the centre of one of the largest US intelligence breaches in decades, expected to plead not guilty at arraignment on Friday in United States.

Hong Kong-born Lee, who was a CIA officer between 1994 and 2007, is also alleged to have deposited hundreds of thousands of dollars more in illicit payments from his Chinese handlers into his personal HSBC accounts in Hong Kong.

He is scheduled to be arraigned in a US court on Friday, where he is expected to plead not guilty to one count of conspiracy to gather or deliver national defence information to aid a foreign government, as well as two counts of unlawful retention of national defence information.

“Mr Lee has denied being a spy, and we intend to prove that he was not a spy at trial,” lawyer Edward MacMahon told the Post. “He will, of course, be pleading not guilty.”

Lee was arrested by FBI agents in January , after landing at John F Kennedy International Airport in New York from Hong Kong, on charges of unlawfully retaining national defence information.

Federal prosecutors initially accused him of having illegally kept notebooks containing sensitive information about CIA operations. But last week he was accused of a far more serious crime – conspiring to commit espionage.

Lee, 53, was indicted on May 8 by a federal grand jury in Virginia, and is due to be arraigned at 9am on Friday in Alexandria before US District Judge TS Ellis III.

Lee, also known as Zhen Cheng Li, has been described by many as a mole at the centre of what was considered one of US worst intelligence breaches in decades, one that led to the dismantling of the US spy network in China.

The New York Times reported last year that the first signs of trouble surfaced in 2010. After 2010, the FBI and the CIA opened a joint investigation into what had happened.

According to the indictment – which did not touch on the consequences of Lee’s alleged espionage – he met two intelligence officers of China’s Ministry of State Security in Shenzhen, a city bordering Hong Kong, in April 2010.

At the time, according to the indictment, they gave him “a gift of $100,000 cash in exchange for his cooperation”, with the promise that “they would take care of him for life”.

In the following month, documents read, Lee began receiving a series of written instructions from the Chinese intelligence officers, some of the envelopes accompanied by gifts.

Those offices, according to the indictment, requested at least 21 pieces of information, most asking Lee to reveal sensitive information about the CIA, including national defence information.

The indictment noted that the Chinese intelligence and security agency, and its bureaus, were tasked with conducting clandestine human source operations, of which the US was a principal target.

Court documents claim that, in May 2010, Lee made a cash deposit of HK$138,000 (US$17,468) into one of his personal HSBC accounts in Hong Kong.

“This would be the first of hundreds of thousands of dollars in cash deposits Lee made” until December 2013, the documents read.

Prosecutors mentioned as further evidence a document created on Lee’s laptop that included information on places where the CIA would assign officers, and the location of a sensitive operation.

“It was later determined that the information Lee included in this document was national defence information of the US that was classified at the secret level,” court papers read.

The indictment also claims that in response to a tasking from Chinese intelligence officers, Lee drew a sketch of the floor plan of a particular CIA facility abroad.

According to court documents, the taskings continued into at least 2011.

Lee is also accused of having made several false statements to US authorities.

http:// www.scmp.com/news/hong-kong/hong-kong-law-and-crime/article/2146430/court-documents-claim-china-promised-take

Deadly explosion at California spa was targeted attack, police say

Officials said the blast, which occurred around 1pm on Tuesday in Aliso Viejo, about 50 miles (80.5 kilometres) south of Los Angeles, appeared to be an intentional act caused by a package that specifically targeted the office where the explosion occurred.

A woman was killed and three other people were injured in the blast. One of the officials said one of those people was believed to be the target.

The cause of the blast remained a mystery for much of the day, with officials initially believing a car had smashed into the building. But sheriff’s officials said the size of the blast made it suspicious.

It wasn’t clear how the explosive device came to be in the business, said Paul Delacourt, assistant director of the FBI’s Los Angeles office.

“We do not believe this was an accident,” Delacourt told reporters. “This explosion was caused by a device. … The damage at the scene was extensive.

A spokeswoman for the US Postal Inspection Service, the federal law enforcement branch of the US Postal Service, said the package delivered to the spa did not go through the Postal Service mail system.

The official said the information was based on a preliminary investigation. Authorities said they had not yet located an explosive device and were searching through debris.

“We have not found any type of specific device inside of the building right now that would tell us or lead us to exactly what the device was, if there was a device,” said Commander Dave Sawyer of the Orange County Sheriff’s Department.

The blast blew siding off the walls, exposing insulation and framing and shattering windows at the two-story building that houses medical offices.

“The corner of that building, the whole bottom floor is pretty much blown out,” said Orange County Fire Authority Capt. Tony Bommarito.

The woman who was killed inside the building was “in close proximity” to the explosion, Sawyer said. The three people who were injured were nearby and were being questioned by investigators late Tuesday night, he said.

“Any time you see an explosion of this magnitude, it would definitely be suspicious to us,” Sawyer said.

Authorities were not searching for any specific suspects Tuesday night, but the investigation was continuing, he said.

Mary McWilliams told The Orange County Register that she arrived for an appointment to find smoke in the area and car alarms going off.

She said she saw two burned women staggering out of the building, covered in ash and soot.

One woman, who had burned skin peeling from her arm, said, “Take care of my mother,” McWilliams said. The other woman was bleeding from her head.

Fire officials said a third person suffered smoke inhalation.

A day care centre and preschool across the street were evacuated. Some children held hands as they were led out by firefighters while sheriff’s deputies rolled out babies in cribs.

“When I was playing outside I heard the big crash. I thought it was a garbage truck but it was a building that smashed,” 6-year-old Kingston Dik told KNBC-TV.

http:// www.scmp.com/news/world/united-states-canada/article/2146463/california-building-explosion-investigated

Anons not to slide, but did you see the post I dropped about the Chinese Spy Indictment that was opened this week?