After Meeting With US Delegation, Xi Hints That China Won't Budge On Economic Reforms

In brief remarks to the press following his meeting Friday with Treasury Secretary Steven Mnuchin and Trade Rep Robert Lighthizer, President Xi affirmed that trade talks between the US and Chinese delegations will continue in Washington next week, and that while he hopes the two sides can reach a "mutually beneficial win-win agreement" he insisted that it wouldn't come at the expense of "certain principles."

"We are willing to adopt a cooperative approach to resolve and promote an agreement acceptable to both sides. However, cooperation requires certain principles."

CNBC's Eunice Yoon recounted the details of the announcement in a series of tweets. She described Xi's remarks as a reminder that China has "its own bottom line" in talks with the US.

The fact that "very difficult issues remain" suggests that China and the US remain at an impasse on the most contentious issues like structural reforms to the Chinese economy and IP theft. Other media reports affirmed that the US and China have agreed to work toward a memorandum of understanding, and CCTV reports tokenly that China and US reach consensus on main topics "in principle", but as with all prior negotiations, it is unclear if this represents any real progress. In another bid to try and push the market higher, Chinese media reported that the US and China had reached agreement on main issues "in principle"...which succeeded in pushing US futures higher, though, again, it's unclear what exactly this means. Xinhua also reported that issues including technology transfers, IP protection, non-tariff barriers, services, agriculture and trade balance have been discussed.

What's the solution? Why kick the can down the road.