World

Bans cast pall over US-China trade talks

By AAP Newswire

The United States has imposed visa restrictions on Chinese officials for the detention or abuse of Muslim minorities, angering Beijing, but a US official said high-level trade talks would still take place on Thursday and Friday as planned.

The State Department announced the visa plan just a day after the US Commerce Department cited the mistreatment of Uighur Muslims and other predominantly Muslim ethnic minorities in China in its decision to add 20 Chinese public security bureaus and eight companies to a trade blacklist.

The State Department did not name the Chinese officials affected by the visa clampdown. Secretary of State Mike Pompeo said the restrictions "complement" the Commerce Department's actions.

China's embassy in Washington denounced the move as "made-up pretexts" for interfering in China's internal affairs.

"#Xinjiang affairs are purely China's internal affairs that allow no foreign interference. We urge the US to correct its mistakes at once and stop its interference in China's internal affairs," the embassy said on Twitter.

Major US stock indexes added to losses after the State Department's announcement, with the S&P 500 index closing down about 1.6 per cent. Investors feared the escalating tensions between Washington and Beijing could doom efforts to get the trade negotiations back on track.

The US moves cast a pall over US-China trade talks in Washington, where deputy negotiators met for a second day to prepare for the first minister-level meetings in more than two months on Thursday and Friday.

A spokesman for the US Trade Representative's office said that no meetings were scheduled for Wednesday, but that high-level talks involving Chinese Vice Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin would take place as planned on Thursday and Friday.

A Chinese diplomat told Reuters that China wanted a deal, but it cannot be a "zero-sum game".

The diplomat added that it was important for the United States to accept the differences between the two countries' economic systems, particularly China's state-led development model.

China needed to protect its sovereignty and right to develop its economy, added the diplomat, who is not directly involved in the trade talks.

China was motivated to improve intellectual property protections, as this was in its interests, but he said US allegations of IP theft by China were unfair.

Prospects for a breakthrough in the on-again, off-again trade talks sagged after the Commerce Department's blacklisting announcement on Monday. Hikvision, which bills itself as the world's largest maker of video surveillance gear, was among the firms targeted.

The listing bars the firms from buying components from American companies without US government approval, a potentially crippling move.

Washington is also moving ahead with discussions around possible restrictions on capital flows into China, with a focus on investments made by US government pension funds, Bloomberg reported.

Tit-for-tat tariffs imposed by the United States and China have roiled financial markets and slowed capital investment and trade flows.

International Monetary Fund Managing Director Kristalina Georgieva issued a stark warning about the state of the global economy, saying an economic deceleration could worsen without action to resolve trade conflicts and support growth.

The trade talks in Washington are taking place days before US tariffs on $US250 billion ($A370 billion) worth of Chinese goods are slated to rise to 30 per cent from 25 per cent. President Donald Trump has said the hike will take effect on October 15 if no progress is made in the negotiations.

Trump said on Monday a quick trade deal with China was unlikely, and that he would not be satisfied with a partial agreement.