China to buy more US cars, planes, energy

David Lawder and Andrea Shalal

China has pledged to buy nearly an additional $US80 billion ($A116 billion) of US manufactured goods over the next two years plus over $US50 billion more in energy supplies, says a source briefed on a trade deal to be signed on Wednesday.

Aiding a sector that enjoys a rare trade surplus with China, Beijing would also boost purchases of US services by about $US35 billion over the same two-year period, the source told Reuters on Monday.

The Phase 1 agreement calls for Chinese purchases of US agricultural goods to increase by some $US32 billion over two years, or roughly $US16 billion a year, the source said.

When combined with the $US24 billion US agricultural export baseline in 2017, the total gets close to the $US40 billion annual goal touted by U.S. President Donald Trump.

The $32 billion agriculture increase over 2017 was confirmed by Myron Brilliant, the US Chamber of Commerce's head of international affairs, who spoke to reporters on Monday in Beijing.

The numbers, expected to be announced on Wednesday at a White House signing ceremony between Trump and Chinese Vice Premier Liu He, represent a staggering increase over recent Chinese imports of US manufactured goods.

Two other sources familiar with the Phase 1 trade deal agreed with the rough breakdown of the purchases, without providing specific numbers.

When the Phase 1 trade deal was struck on December 13, US officials said China had agreed to buy $US200 billion in additional US farm products, manufactured goods, energy and services over the next two years, compared to the baseline of 2017.

They said they would publish targets for the four broad areas, but would keep details of specific products classified to avoid market distortions.

Trump had mainly touted the increased farm exports, which would benefit a major political constituency that has been battered by Chinese retaliatory tariffs during his 18-month trade war with Beijing.

Company executives have been waiting eagerly for details of what other US goods China would be buying more of, aside from farm products, after 18 months of tit-for-tat tariffs that have stalled US business investment.

The $US80 billion increase for manufactured goods includes significant purchases of autos, auto parts, aircraft, agricultural machinery, medical devices and semiconductors, said one of the sources, without giving the names of any specific suppliers.

Many economists and experts are dubious that the Phase 1 trade agreement will be implemented as written, despite what US officials describe as an important enforcement clause in the deal.

That enforcement mechanism allows grievances to be aired through escalating consultations that would reach Chinese Vice Premier Liu He and US Trade Representative Robert Lighthizer.

Lighthizer on Monday called the deal a "huge step forward" for US-China trade relations and "a really, really good deal for the United States." He told Fox Business Network that Beijing's compliance would be monitored closely.