U.S. officials say looking for steps by China to open markets

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"China Comprehensive Economic Dialogue", will formally take place on Wednesday.

People familiar with the meetings said that, as of early Wednesday, U.S. officials were expecting a tough day of discussions and that considerable distance remained between the two sides over what kind of concrete agreement - if any - they hope to reach during the day.

These issues included demands by the US for access to the financial services industry in China, reducing excess steel capacity by China, reductions in tariffs on autos, cutting subsidies for businesses that are state-owned, ending requirements by China for localization of data and lifting caps on ownership for foreign companies in China, the official added.

The two sides had a day of contentious talks at the U.S. Treasury Department to address the United States' US$340 billion trade deficit with China, plus restrictions on access to Chinese markets.

The US side blamed the unbalanced relationship - marked by a US trade deficit with China of $309 billion past year - on Beijing's policies that impede access to their market, while China says Washington's own rules restricting US high-tech exports are partially to blame.

Both sides agreed that one of the solutions to address the trade imbalance is for the United States to expand exports to China, instead of reducing imports from China, said Chinese Vice Finance Minister Zhu Guangyao after the conclusion of the talks.

He added that in order to address the imbalance, China has been urging the U.S. to remove its outdated regulations on export control and increase the exports of high-tech products to China.

China will push for this in a one-year action plan for economic cooperation which both sides discussed, Zhu said. The forum for economic and trade talks was created in April when President Donald Trump met his Chinese counterpart Xi Jinping in Florida, and agreed to a 100-day action plan. The law, which came into effect on June 1, requires companies to store their data within China's borders and share program source code with the government - provisions that US companies fear will expose them to intellectual property theft.

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In May, the governments announced the first set of measures, including China agreeing to resume USA beef imports.

While Trump built a positive rapport with Xi during the April meeting at his Mar-a-Lago resort in Florida, there are signs of growing friction as the US pushes China to rein in North Korea's nuclear threat.

Wang, who is in Washington for the first round of China-US Comprehensive Economic Dialogue, said that as China upgrades its industries, there is a huge market for US exports of advanced technologies, key equipment and critical parts to China.

China's delegation leader, Vice Premier Wang Yang, left the Treasury building without speaking to reporters.

Wang seemed to hint at the USA to not press too hard, noting the importance of the two countries "having dialogue, not confrontation". The law under which the Trump administration is investigating steel imports has only been used twice to sanction a foreign industry for compromising national security.

Shares of United States Steel Corp closed up 4.8 percent, while AK Steel rose 3.6 percent and Nucor rose 2.2 percent.

This could cast a shadow over their trade relations amid White House's threats to impose steel and aluminium tariffs on Beijing.

"There is no limit to the growth of the Chinese market, and China-U.S. business cooperation holds out a promising future", he said.

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