The Chinese military has moved to intercept USA warships sailing through the contested South China Sea in the latest of what has been a series of tense encounters involving the two powers in the Asia-Pacific region. Last year, US President Donald Trump imposed tariff hikes of up to 25 per cent on United States dollars 250 billion of Chinese goods.
Lu also said Vice President Wang Qishan would attend the annual World Economic Forum in Davos, Switzerland in late January, but added that he had not yet heard of any arrangements for a meeting with Trump there.
The US delegation, which is led by Deputy US Trade Representative Jeffrey Gerrish and includes officials from the Treasury, Commerce, Agriculture and Energy departments, left its hotel without talking to reporters ahead of the talks. He added the US has rebuilt China and he didn't believe they were ready to negotiate yet.
But he said agreement on structural trade issues would be harder to reach.
U.S. Presidents Donald Trump launched the trade war in July by hiking tariffs on Chinese goods in response to complaints Beijing steals or pressures companies to hand over technology.
China's Foreign Ministry Spokesperson, Lu Kang, addressed the encounter during a press briefing later on Monday, stating that Beijing had "lodged stern representations" with Washington. Analysts say it is unlikely that China would concede to allow outside monitoring of enforcement.
China and American officials began talks on Monday to potentially resolve a bruising trade war between the world's two biggest economies. Vietnam, the Philippines, Malaysia, Brunei and Taiwan have counter claims over the South China Sea.
They are different to the Spratley Islands - a series of artificial islands constructed by the Chinese and which have been fitted with military bases and airfields.
Trump imposed import tariffs on hundreds of billions of dollars of Chinese goods previous year and threatened more to pressure Beijing to change its practices on issues ranging from industrial subsidies to intellectual property and hacking.
The trade clash reflects American anxiety about China's rise as a potential competitor in telecommunications and other technology. "Our sense is that there's good progress on the purchase piece", said one person familiar with the talks.
As the Trump administration continues trade negotiations with China, the USA delegation is taking additional steps to make sure the Communist country follows through on its pledges.
Scott Kennedy, director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies in Washington, said the two sides for the first time were discussing topics that matter most to the Trump administration.
The U.S. economy grew at an annual rate of 3.4 percent in the third quarter, and unemployment is at a five-decade low. These include expanded Chinese purchases of American products, greater protections for USA intellectual property, constraints on Chinese industrial policy, and enforcement and verification of follow-through by China. They complain China's companies are treated unfairly in national security reviews of proposed corporate acquisitions, though nearly all deals are approved unchanged.
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