U.S. sees China in 'retrenchment' on move toward market economy: U.S. official

By Steve Holland and Doina Chiacu WASHINGTON (Reuters) - The United States believes progress with China on a range of trade issues has become more difficult and Beijing appears on a "trajectory of retrenchment," a senior Trump administration official said on Tuesday. President Donald Trump will insist in upcoming talks with Chinese President Xi Jinping that more balance is needed in U.S.-Chinese trade relations, the official said, briefing reporters ahead of Trump's Nov. 3-14 Asia trip that will include a stop in Beijing. Trump's Asia tour is shaping up to be the longest by an American president in 25 years. With tensions aboil over North Korea's nuclear challenge, Trump leaves on Friday on a trip with stops in Japan, South Korea, China, Vietnam and the Philippines. While in South Korea, Trump will speak to U.S. and South Korea troops, but time constraints will preclude a stop at the demilitarized zone, the border region that separates North and South Korea, another senior official said. The official's remarks on the U.S.-Chinese trade relations could herald some friction in Trump's talks with Xi on a state visit to Beijing that comes just as Xi consolidated power in a Communist Party congress. Trump has repeatedly complained about the U.S. trade deficit with China, which was $347 billion in 2016. But he has shied away from taking major punitive trade actions against China. The official said over the long-term China must provide fair and reciprocal treatment to U.S. and international companies and stop "predatory trade and investment practice." "Progress on a range of bilateral economic issues has become increasingly difficult. We believe this reflects a slowdown and even a retrenchment in China's move toward a market-oriented economy," the official said. On Monday, Chinese Ambassador to the United States Cui Tiankai predicted in a briefing with reporters that "there will be significant outcomes on the economic side" while Trump is in Beijing. Cui said countries cannot look simply at trade balance and imbalance because what is behind those numbers is important and "very complicated." He called the U.S. trade deficit a "structural problem" that cannot be resolved overnight. While on his trip Trump will also hold his first face-to-face meeting with Philippines President Rodrigo Duterte on the sidelines of the Association of South East Asia Nations summit being held in Manila. Despite a history of anti-American rhetoric, one of the administration officials said Trump and Duterte have developed a "warm rapport." (Editing by Chizu Nomiyama; Editing by David Gregorio)