China to step up US agriculture purchases under phase one trade war deal after Hawaii talks, sources say
South China Morning Post | 19 June 2020
China to step up US agriculture purchases under phase one trade war deal after Hawaii talks, sources say
China plans to accelerate purchases of American farm goods to comply with the phase one trade deal with the United States following talks in Hawaii this week.
The world’s top soybean importer intends to step up buying of everything from soybeans to corn and ethanol after purchases fell behind due to coronavirus disruptions, said two people familiar with the matter, who asked not to be named because the information is private.
A separate person said the Chinese government has asked state-owned agricultural buyers to make all efforts to meet the phase one agreement. China’s Ministry of Commerce did not respond to a fax seeking comment.
The plan offers respite to markets concerned about trade disruptions after the countries exchanged blows over everything from the origins of the coronavirus to new security legislation in Hong Kong.
On Thursday, US Secretary of State Michael Pompeo said China’s top foreign policy official committed to honour all of his nation’s commitments under the trade deal.
“During my meeting with CCP Politburo member Yang Jiechi, he recommitted to completing and honouring all of the obligations of Phase 1 of the trade deal between our two countries,” Pompeo said in a tweet on Thursday, using an acronym for the Chinese Communist Party (CCP).
Pompeo offered no details beyond the tweet, but that was the first substantive news out of the secretive meeting with Yang at Hickam Air Force Base in Hawaii on Wednesday.
It is still unclear how the meeting came about or who had asked for it as both sides have said the other initiated it.
China pledged to buy US$36.5 billion worth of American agriculture products under the phase one deal, up from US$24 billion in 2017, before the trade war.
However, China bought only US$4.65 billion in the first four months of the year, data from the US Department of Agriculture (USDA) showed. That is only 13 per cent of the goal set in the trade dealand almost 40 per cent below the same period in 2017.
China had asked state buyers to halt some purchases of American farm goods
including soy, Bloomberg News reported earlier this month.
However, Chinese importers had continued to increase its American soy purchases, picking up 2.2 million metric tonnes of the oilseed in the two weeks ended June 11, according to the USDA data.
