China Confirms High-Level Trade Talks With US In Malaysia Amid Lingering Trade Frictions

• The two sides will discuss key economic and trade issues within the purview of the critical consensus reached between the heads of state during earlier phone calls.
• Washington, meanwhile,  is considering software export curbs to China in response to Chinese rare earths export restrictions.
• China and the U.S. have held high-level discussions four times this year on the tariff impasse.

A significant headwind that has tempered market optimism in recent sessions may soon be resolved, with the Chinese Commerce Ministry reportedly confirming that bilateral talks will be held between both sides in Malaysia from Oct. 24 to 27.

The Two Meet Again

Chinese Vice-Premier He Lifeng, who is the country’s top trade negotiator, will lead a delegation to Malaysia to hold economic and trade consultations with the U.S. side, the Chinadaily.com reported, citing a spokesperson of the ministry. The two sides will discuss key economic and trade issues within the purview of the critical consensus reached between U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, during their phone calls held earlier this year.

Market Stays Skeptical

Amid the development, the SPDR S&P 500 ETF (SPY), an exchange-traded fund that tracks the S&P 500 Index, ticked up 0.04% in Thursday’s early premarket session, while the Invesco QQQ Trust (QQQ) ETF, which tracks the Nasdaq 100 Index, was also up marginally. On Stocktwits, retail sentiment toward the SPY ETF was ‘bullish’ early Thursday, while that toward the QQQ ETF remained ‘extremely bearish.’ The message volume on both streams remained ‘high.’

The SPY and QQQ ETFs are up 15% and 19%, respectively, for the year-to-date period, compared to the 36% gain for the iShares MSCI China ETF (MCHI).

China and the U.S. have held high-level discussions four times this year about the tariff impasse, with the last meeting held in Stockholm, Sweden, discussing mainly economic issues and a potential takeover deal for the U.S. unit of TikTok. 

US Mulling Software Curbs

In the meantime, Washington has hardened its stance against China. U.S. Treasury Secretary Scott Bessent reportedly told CNBC that the U.S. is considering curbs on software-related exports to China in response to Chinese rare earths export restrictions. “Everything is on the table,” Bessent said. “If these export controls, whether it’s software, engines or other things happen, it will likely be in coordination with our G-7 allies.”

Trump reportedly said on Wednesday that he had a long meeting scheduled with Xi when the two meet in South Korea during his diplomatic trip to the country next week. The two sides will likely discuss China’s soybean purchase from the U.S. and curbs on nuclear weapons.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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