Beijing said it would issue a list of planned relaxations on foreign investment by June 30, meeting a key US demand just 48 hours before US commerce secretary Wilbur Ross is due in Beijing to lead a third round of trade talks with vice premier Liu He.

China’s commerce ministry said on Thursday that the new “negative list” would ease or cancel existing restrictions on foreign investment in sectors including energy and transportation. 

China’s so called negative list identifies areas that are off-limits to foreign investors — sectors not included on the list are open to foreign investment. The US government and business community has been increasing pressure on China to remove investment restrictions on targeted areas.

In an extensive list of US demands presented to Chinese trade negotiators in early May, Trump administration officials led by Treasury secretary Steven Mnuchin urged China to issue “an improved nationwide negative list” by July 1. 

Thursday’s announcement is the latest in a series of measures revealed by China over recent months, as it seeks to head off a trade war with the US. On Wednesday evening the State Council announced that it would slash tariffs on a range of consumer items including clothing, cosmetics and home appliances. 

The Chinese government in April announced loosened restrictions on foreign investment in the financial and automotive sectors. In each instance, Chinese officials have insisted that the liberalisations were adopted because it was in China’s own interest to do so, and not because of pressure from US President Donald Trump. 

On Tuesday Mr Trump reignited trade tensions between the world’s two largest economies by threatening to impose punitive tariffs on $50bn worth of Chinese industrial exports “shortly” after June 15. The president added that his administration would also implement wide-ranging restrictions on Chinese investment in the US “shortly” after June 30.

The surprise announcement, which came a fortnight after Mr Mnuchin said both sides were “putting the trade war on hold”, angered Chinese officials. 

In a separate statement issued late on Wednesday night, the commerce ministry reiterated China’s intention to respond in kind if the US pressed ahead with its tariff threats. “No matter what measures the US takes, China has the confidence and ability to safeguard the interests of the Chinese people and core national interests,” it said. 

“Trump is not reliable,” said Shi Yinhong, a foreign affairs expert at Renmin University in Beijing. “If Trump wants a trade war, China will retaliate.”

Despite this week’s exchange of threats, many US executives are optimistic that Mr Ross and Mr Liu’s weekend discussions will help avert the threatened trade war. “We actually haven’t had any tariffs [imposed yet],” William Zarit, head of the American Chamber of Commerce in China said at a briefing on Wednesday. “It’s still about the threat of tariffs.”

Additional reporting by Xinning Liu

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