Donald Trump thought he had brought home the bacon at the weekend with a mini trade deal.

The US President was in a bullish mood after hailing a “very substantial phase one” agreement following talks between the negotiating teams of the United States and China in Washington on Friday.

In response, President Xi Jinping’s government appeared more circumspect with the country’s state-run media hardly mentioning the words “agreement” or “deal.”

The silence was also deafening from the Ministry of Commerce. It took China Daily to add some flesh to the bacon bones theory in an editorial:

“Whatever differences exist between the two countries’ reports, one thing is certain: China and the US have reached consensus. Trump announced progress to the media in the presence of [Trade envoy] Liu [He], calling what they reached an ‘agreement’.

“In China’s text, there is no use of the word ‘agreement,’ but all words lead in that direction. Liu described the discussions as ‘candid, efficient and constructive’, and included words like ‘substantial progress’.”

On Tuesday, the Ministry of Foreign Affairs was more forthcoming. “China and the US are on the same page, and have no difference in the stance on reaching a trade deal,” Geng Shuang, a ministry spokesman, told a media briefing. “This trade deal is going to carry very important meaning to China, the US and the world, it will be beneficial for world trade.”

Loose ends

Still, US Treasury Secretary Steven Mnuchin has made it clear there are crucial loose ends to tie up before “phase one” can be signed off. Even at this stage, details are scarce.

Vice-Premier Liu arrived with a narrow agenda, which focused on increasing US agricultural purchases, safeguards for intellectual property protection and a further opening up of financial markets.

“The next phase is deputy-level calls that will be going on this week. [US Trade Representative Robert] Lighthizer and myself will have a principal-level call next week with Vice-Premier [Liu],” Mnuchin told the CNBC network, adding that the aim was to finalize a deal before the Asia-Pacific Economic Cooperation, or APEC, summit in Chile next month.

Moreover, that would be just “phase one” if Trump and Xi sign it off in Santiago.

In the meantime, ‘bringing home the bacon’ is very much in the minds of Chinese shoppers after a raft of data was released by the National Bureau of Statistics on Tuesday.

Consumer inflation accelerated at its fastest pace in almost six years in September as African swine fever triggered a 69% rise in pork prices.

Authorities have gone as far as tapping the nation’s pork reserve to control prices of the staple meat before the epidemic becomes a political and economic liability for Beijing.

Culled

Official figures have confirmed that around one million pigs have been culled in the past 12 months.

“Looking ahead, consumer price inflation should continue to accelerate in the coming months as supply disruptions continue to push up pork prices and as the drag from lower oil prices eases,” Martin Lynge Rasmussen, of Capital Economics, said in a note.

Overall, the consumer price index, which is a key gauge of retail inflation, hit 3% last month, which was slightly up from August’s number and the highest since November 2013. Pork prices fuelled the rise, surging by 69% in September compared to the same period in 2018.

But then, the numbers have been disappointing across the board as the world’s second-largest economy slows.

Last month, factory gate prices declined at their fastest pace in more than three years. This, in turn, reinforced the case for Beijing to unveil further stimulus as manufacturing cools on weak demand and Sino-US trade pressures.

“Since there is very limited policy autonomy at ministries, local governments, and SOEs [state-owned enterprises], the policy decision pass-through has to come from the above,” the Bank of America Merrill Lynch stated in a note.

– additional reporting AFP