China and the United States started vice ministerial-level talks in Beijing on Monday, with their ongoing trade dispute having rattled global stock markets and blurred the outlook for the world economy.
The governments of the world's two biggest economies are expected to talk for two days through Tuesday about how to strengthen the protection of intellectual property rights and boost China's imports of U.S. products, sources close to the matter said.
It is the first time Beijing and Washington have had direct dialogue on trade since Chinese President Xi Jinping and U.S. President Donald Trump held a meeting on Dec. 1 in Buenos Aires.
At their summit, Xi and Trump made an agreement that the United States and China will hold off on imposing further tariffs on each other's imports and try to complete talks on technology and intellectual property rights issues within 90 days.
The Trump administration warned at the time that "if at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent," indicating that a failure to finish negotiations will rekindle trade strains.
A delegation led by Deputy U.S. Trade Representative Jeff Gerrish, who is the deputy chief of the Office of the U.S. Trade Representative, visited the Chinese Commerce Ministry on Monday morning.
With trade tensions between the two powers escalating, stock prices have faced downward pressure across the globe and fears have grown that weakness in the Chinese and U.S. economies could deal a heavy blow to the world economy.
Beijing and Washington hope the latest talks will pave the way for a ministerial-level meeting that U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He, Xi's economic adviser, will attend, the sources said.
But skepticism is rife about whether China and the United States can make concessions as they have been not only engaged in a tit-for-tat tariff trade war but are also at odds over security matters such as Taiwan and the South China Sea.
On the same day as the vice ministerial-level trade talks began, the U.S. missile destroyer sailed near the Paracel Islands, claimed by both China and Vietnam, the Chinese Foreign Ministry said, criticizing the move for infringing on Beijing's sovereignty.
"We urge the United States to immediately stop provocative actions," the ministry's spokesman Lu Kang told reporters.
"We have properly tried to resolve the various problems that exist between China and the United States, including economic and trade issues," Lu said, adding, "Both sides should take responsibility for creating a necessary and good atmosphere."
The United States has so far imposed tariffs of up to 25 percent on $250 billion of Chinese imports, with Trump calling on Beijing to reduce its massive trade surplus with the United States and rectify the country's alleged unfair business practices.
In retaliation, China has levied tariffs on more than 80 percent of all U.S. imports.