Beijing's economic 'red lines' may clash with Trump's 90-day plan

U.S. President Donald Trump and Chinese President Xi Jinping may have put their tit-for-tat tariff fight on hold, but differences between the two countries' views on technology and state-supported businesses will challenge negotiations between the two economic giants,

"Staunchly committed to the Chinese economic model, Xi will continue to lend state support to targeted industries, particularly in technology under the Made in China 2025 programme," Eleanor Olcott, China policy analyst at research firm TS Lombard, wrote on Monday.

Washington has accused China of forcing technology transfers, and tacitly supporting intellectual property violations and cyber-crime, but those issues were downplayed in official descriptions of the weekend's agreement.

"Despite White House economic advisor (Larry) Kudlow suggesting that the two sides are 'pretty close' on an agreement on intellectual property theft, 90 days still looks like a short period for discussions on complicated issues such as non-tariff barriers," wrote Zhu Huani, an economist at Mizuho Bank in a note on Tuesday.

"Whilst reducing (the) trade gap could be the easier part to begin with, China is less likely to make concessions on its industrial policies such as 'Made in China 2025,' which might hinder discussion surrounding technology transfer," added Zhu.

The "Made in China 2025" plan is Beijing's industrial policy to invest heavily in high-end technologies such as artificial intelligence in a bid to catch up with rivals like the U.S. and Germany.

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