Beijing weighs fentanyl offer to US to start trade talks

Addressing the Trump team’s gripes over China’s role in the fentanyl crisis could let both sides soften trade stance

Chinese companies produce large quantities of the chemicals known as ‘precursors,’ which are sold over the internet, flowing from China to criminal groups in Mexico and elsewhere that produce fentanyl and traffic it into the US. Picture: AP

Beijing is considering ways to address the Trump administration’s gripes over China’s role in the fentanyl trade, according to people familiar with the matter, potentially offering an off-ramp from hostilities to allow for trade talks to start.

Chinese leader Xi Jinping’s security czar, Wang Xiaohong, in recent days has been inquiring about what the Trump team wants China to do when it comes to the chemical ingredients used to make fentanyl, the people said. Chinese companies produce large quantities of the chemicals known as “precursors,” which are sold over the internet, flowing from China to criminal groups in Mexico and elsewhere that produce fentanyl and traffic it into the US.

Chinese leader Xi Jinping’s security czar, Wang Xiaohong. Picture: AFP

Part of Beijing’s thinking involves dispatching Wang, who is the minister of public security and a senior leader within the State Council, China’s cabinet, to the US to meet with senior Trump officials, the people said, or have him meet with US officials in a third country.

The discussions remain fluid, the people cautioned, while adding that Beijing would like to see some softening of stance from President Trump on his trade offensive against China as well.

The latest development in Beijing comes as its trade war with the US, which has led to both sides essentially imposing trade embargoes on each other, is starting to take a toll on a Chinese economy already struggling with a multiyear property crisis, deflationary pressure and weak consumer and business confidence.

While the Xi leadership is preparing the nation for a long struggle against the US, continuing to strengthen central control over the economy and overall society, the intensifying economic pain also provides Beijing with incentives to engage with Washington to alleviate the near-term pressure.

In a visible shift in tone Friday, China’s Commerce Ministry said it was weighing starting talks with the US to halt a trade war while expressing Beijing’s wish for the Trump administration to “show sincerity” to talk. Previously, the ministry had demanded that Washington slash its steep tariffs on China first as a condition for negotiations.

Wall Street Journal