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US-China trade talks in Beijing to continue for third day on Wednesday, US Trade Representative's office confirms

The talks, the first of their kind since the two countries' leaders brokered a temporary truce to the trade war at the G20 summit in December, were initially scheduled to take place over two days, with discussions continuing late into the night on Tuesday.

US President Donald Trump tweeted on Tuesday that the negotiations were going "very well".

Officials on both sides have said little else about the progress of discussions so far, though a leaked photograph from Monday indicated a surprise appearance by Liu He, China's vice-premier, at the meeting of otherwise low-ranking officials.

The US delegation, led by deputy USTR Jeffrey Gerrish, includes representatives from the departments of energy, agriculture, treasury and commerce.

That talks will continue for a third day is an indication "the whole thing has not blown up yet and that they believe that it's worthwhile to spend more time together", said Claire Reade, a former assistant USTR for China affairs in the Obama administration. "If they stopped after two days and everyone said 'go to hell' then that would not be a good thing."

But according to Reade, such extensions, which she said are common in trade negotiations, could also be evidence "of a very typical, painful, incremental movement by the Chinese, testing the US resolution and persistence in particular areas".

Chinese acquisitions of US companies plunge 95 per cent in 2018

"The Chinese side may try to float trial balloons of approaches that the US side can quickly shoot down", she added.

She added that US delegates could clearly tell their Chinese counterparts what proposals are not acceptable to the Trump administration, despite their limited powers under a president who "has made it very clear that he will decide if any deal with any country is good enough".

Speaking on Monday to CNBC, US Secretary of Commerce Wilbur Ross said that there was a "very good chance" of reaching a settlement that would satisfy both sides, but said that issues like enforcement and compliance would remain challenges.

" Donald J. Trump (@realDonaldTrump) January 8, 2019

Michael Wessel, a commissioner on the US-China Economic and Security Review Commission (USCC), an influential congressional body, said on Monday that the "only deal that can put us on a better track is one that requires serious structural changes in China's economy that are subject to timely and effective enforcement".

"Relying on China's government or its court system to properly implement, monitor and enforce any commitments would be a fool's errand," he said.

"Specific commitments, coupled with success-based metrics and automatic enforcement mechanisms have to be part of any agreement for it to be successful."

Additional reporting by Doug Palmer of POLITICO

This article originally appeared on the South China Morning Post (SCMP).

Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.

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