BEIJING: The U.S. and China made progress on narrowing their differences on trade issues, especially on purchases of U.S. goods and services and widening access to China’s markets, though the two sides are far from striking a deal.

In two intense days of talks in Beijing that will continue into Wednesday, U.S. and Chinese midlevel negotiators addressed a number of nettlesome issues and tried to specify how to ensure China will carry out pledges it made, according to people on both sides briefed on the discussions. The U.S. team isn’t expected to leave Beijing until late Wednesday afternoon.

“Talks with China are going very well!” President Trump wrote in a tweet while the negotiations were wrapping up for the day Tuesday after 9 p.m. Beijing time. A Chinese official with knowledge of the talks described the conversations as “constructive.”

The bilateral trade tensions have roiled global markets and added a new, bitter dimension to the increasingly rancorous competition between the two powers. Both sides believe they’re making enough progress this week for a next round of talks among cabinet-level officials, probably later this month in Washington.

Divisive issues remain between the two sides and within the Trump administration, the people said. One big challenge is figuring out how to hold Beijing to commitments to keep Chinese firms and officials from pressuring U.S. partners into transferring technology against their will. The U.S. Trade Representative Office has been asking industry groups and think tanks for suggestions on how they should carry out such enforcement.

The Trump administration also remains divided on how hard to push for additional purchases of mostly agricultural and energy products as well as U.S. brokerage, banking and insurance services. That would attempt to address Mr. Trump’s concerns about the bilateral trade imbalance vastly in China’s favor. U.S. Treasury Secretary Steven Mnuchin has talked about China committing to buying $1.2 trillion U.S. goods and services, although he didn’t specify a time frame for the purchases.

Meanwhile, U.S. Trade Representative Robert Lighthizer, who is heading the China trade talks and whose deputy led the U.S. team in Beijing, has played down the prospect of more purchases. Instead he is focusing on structural issues such as Chinese subsidies to domestic companies and protection of intellectual property. He’s considering a number of ways to make sure that Beijing lives up to its words on such subjects. They include eliminating the existing 10% tariffs on $200 billion Chinese goods imposed last year only when China starts carrying out its pledges. Another option is suspending some tariffs but reserving the right to reimpose them if China fails to follow through on its promises.

Josh Kallmer, executive vice president at the Information Technology Industry Council, said a new proposed Chinese law on foreign investment could serve as “the basis for changes to policies and practices related to tech transfer.” Beijing recently released a draft of the law that promises to address some complaints by foreign companies operating in China about policies and practices that favor domestic firms.

But Michael Wessel, a member of a Congressional panel that reviews U.S.-China relations and who consults with the administration, said “specific commitments, coupled with success-based metrics and automatic enforcement mechanisms have to be part of any agreement for it to be successful.”

The negotiations in Beijing, which started on Monday, were conducted as part of a tariff truce declared by President Trump and Chinese President Xi Jinping when the two leaders met in Argentina on Dec. 1. If a full trade deal isn’t concluded by Mar. 1, the Trump administration has said it would raise the tariffs on the $200 billion of Chinese goods to 25% from 10%.

Eager to resolve the trade dispute amid a weakening economy, China is stepping up efforts to meet U.S. trade demands. It recently removed punitive tariffs on U.S.-made cars and auto parts, renewed purchases of American soybeans and began altering an industrial policy criticized by the Trump administration as protectionist.

On Tuesday, China’s Ministry of Agriculture and Rural Affairs announced that it approved imports of five new varieties of genetically modified crops, paving the way for U.S. agricultural firms to sell more biotech seeds to China.

The U.S. is the world’s largest producer of genetically modified crops. China, the top importer of genetically modified soybeans and canola, last made such approvals in June 2017.

This list of approvals released Tuesday includes corn and soybeans produced by DowDuPont Inc., BASF and Syngenta AG. The move is expected to help the U.S. farm industry clear a backlog of biotech seeds that have awaited approval from China, in some cases for years. - WSJ

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