China welcomes US deal, says ‘core concerns’ must be met

China’s government welcomed an interim tre deal with Washington and said Thursday two sides need to dress each or’s “core concerns.” “Phase 1” agreement shows Beijing and Washington “can find appropriate and effective solutions to relevant issues through dialogue,” said a foreign ministry spokesman, Geng Shuang.

China agreed to increase purchases of U.S. exports by $200 billion over two years and to stop pressuring companies to hand over techlogy. Washington dropped plans for ditional punitive tariffs on Chinese goods in fight over Beijing’s techlogy ambitions and tre surplus that threatens to depress global ecomic growth.

“It is imperative that both parties work toger, uphold principles of equality and mutual respect, strictly abide by agreement, dress each or’s core concerns, and work hard to implement Phase 1 agreement,” Geng said.

Geng gave details but Beijing wants tariffs imposed earlier on most of China’s exports to United States to be rolled back, which deal signed Wednesday fails to do. Trump ministration says some penalties must remain in place even after a final agreement is reached to ensure Beijing carries out its promises.

President Donald Trump said earlier he planned to fly to Beijing to start second st of talks, but ecomists say ir remaining disputes are so complex that an agreement is unlikely to be reached until after U.S. presidential election in vember.

Asian stock markets were mixed after signing. China’s main market index closed down 0.5% while Hong Kong vanced and Tokyo was little-changed.

Investors welcomed tre truce but enthusiasm was tempered by questions about how China can carry out promises to buy tens of billions of dollars of American soybeans, oil and or farm and energy exports.

“This has put a pause on things,” said Stephen Innes, a market strategist for AxiTrer. “Throwing a number out re is one thing, but how do we get re?”

China could buy more U.S. soybeans while purchasing less from or suppliers, which will hit those ecomies.

“Where is China getting soybeans w? Brazil. So are y going to stop importing from Brazil?” Innes said.

That would depress prices in Brazil and or markets, making it more attractive for or countries to buy soybeans, coal and or exports from m inste of from United States, said Timme Spakman and Iris Pang of ING.

“Higher (U.S.) exports to China will probably, in part, be offset by lower U.S. exports to rest of world,” y said in a report.

Commodities trers appeared to agree.

Prices of soybeans, cotton and wheat fell on Chicago Board of Tre, suggesting trers don’t expect a quick uptick in overall U.S. sales.

China promised to buy U.S. oil and liquefied natural gas valued at $52.4 billion, but that will be complicated by Beijing’s decision to leave tariffs of up to 25% in place. Importers would have to pass that on to customers or pay mselves.

At same time, growth in Chinese demand is expected to slow. U.S. gas exports will face competition from Russian supplies arriving via a new pipeline.

“With a 25% tariff still in place, U.S. LNG exports to China are going to be a very difficult prospect,” said Gavin Thompson of Wood Mackenzie in a report.

Analysts warn agreement doesn’t cover most contentious disputes over Chinese industrial subsidies and barriers to tre in services.

“This continued gap ensures that bilateral techlogy tensions will remain high in 2020,” said Michael Hirson, Jeffrey Wright, Paul Triolo of Eurasia Group in a report.