China continues to talk down expectations of upcoming Xi-Trump summit at G20 in Osaka next week. Chinese commerce ministry spokesman Gao Feng said “the heads of the two trade teams will communicate, according to instructions passed down from the two presidents.” And, “we hope (the United States) will create the necessary conditions and atmosphere for solving problems through dialogue as equals.”

But most importantly, Gao insisted that “China’s principles and basic stance on Sino-U.S. economic and trade consultations have always been clear and consistent, and China’s core concerns must be properly resolved.” He was clearly referring to disagreement on the three matters of principle that led to the collapse of trade negotiation earlier this year.

To recap, the three main differences include removal of all additional tariffs with the agreement. The among of additional Chinese purchases of US goods have to be realistic. And text of the agreement must be balanced without intrusion of sovereignty. It’s believed that the third one, regarding removal of texts that force China to implement the agreement in domestic laws, is the most crucial red line.

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