Top Xi Aide Is Said to Promise U.S. CEOs Action on China Reforms

(Bloomberg) -- President Xi Jinping's top economic adviser promised a group of U.S. business leaders in Washington on Thursday that he'd take steps to reform China's economy, according to a person familiar with the situation.

Liu He told the group that he'll take on oversight of China's financial policy as part of a cabinet reshuffle this month, and stated his belief that China's economic success is due to its embrace of market forces, said the person, who asked not to be identified discussing a confidential meeting. Liu didn't provide specifics on what action China planned to take, the person said.

Liu said that he had three requests for the Trump administration: Establish a new economic dialogue, name a point person on China issues and hand over a specific list of demands, the person said. Liu pointed out that different U.S. administrations have wanted various things, the person said, with George W. Bush focused on monetary policy and Barack Obama emphasizing investment.

Liu traveled to Washington this week as trade tensions between the world's two largest economies continued to mount. Trump said Thursday the U.S. would slap tariffs on steel and aluminum imports to protect national security, drawing condemnation and threats of retaliation from China to Europe.

Trump Roars, China Yawns, U.S. Shoots Itself in Foot: Gadfly

China's foreign ministry said Friday that Liu will exchange views with U.S. officials on issues of mutual concern, without revealing more details. It also blasted the U.S. move on tariffs, saying it would hurt the global economy.

Liu also met Thursday with White House economic adviser Gary Cohn, Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer. The administration underscored the importance of achieving balance and reciprocity in the economic relationship, according to a White House official.

Attendees at Liu's meeting with business leaders Thursday included Hank Paulson, formerly the U.S. treasury secretary and chief executive officer of Goldman Sachs Group Inc., Larry Fink, chairman of BlackRock Inc., the person said.

Since taking office, Trump has focused criticism on China's alleged abuses of intellectual property and the ongoing trade imbalance between the two nations. In January, he took his first foray into tariff measures by placing charges on imported washing machines and solar panels. 

China's priorities for domestic reform center around the three so-called “critical battles” of financial risk, pollution and poverty. Xi's government is seeking to deal with those ills without slowing the economy too drastically.

Trump's tariffs may yet prompt retaliation from China. Xi's government has already launched a probe into U.S. imports of sorghum, and is studying whether to restrict shipments of U.S. soybeans -- targets that could hurt Trump's support in some politically important farming states.

--With assistance from Jeff Kearns

To contact Bloomberg News staff for this story: Peter Martin in Beijing at pmartin138@bloomberg.net.

To contact the editors responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net, Jeffrey Black

©2018 Bloomberg L.P.

With assistance from Peter Martin