China lodges 'stern' protest over United States warship sailing through South China Sea

US Navy says USS Mc Campbell sailed within 12 nautical miles of the Paracel Island chain

This week's meetings mark a departure from previous attempts to tackle broad areas of contention with high-level meetings, and the representatives from both sides have said that progress is being made.

The talks are going ahead despite tensions over the arrest of a Chinese tech executive in Canada on US charges related to possible violations of trade sanctions against Iran. Last year, US President Donald Trump imposed tariff hikes of up to 25 per cent on Dollars 250 billion of Chinese goods.

The Wall Street Journal reported Tuesday the two sides were narrowing their differences, with Chinese officials offering greater purchases of USA goods and services and Cabinet-level follow-up meetings expected later this month.

The meeting between the US delegation - led by Deputy US Trade Representative Jeffrey Gerrish and including officials from the Treasury, Commerce, Agriculture and Energy Departments - and the Chinese side ran late into Tuesday night. He added the USA has rebuilt China and he didn't believe they were ready to negotiate yet.

"Talks with China are going very well!" president Trump declared Tuesday, a day after the in-person talks in Beijing began with the participation of vice premier Liu and the US trade delegation.

Trump and Chinese President Xi Jinping agreed to halt any further tariff increases for 90 days beginning January 1.

Chinese Foreign Ministry spokesperson Lu Kang confirmed during a press conference later that day that the USA sent a vessel into the area "without permission from the Chinese side".

"I think China wants to get it resolved - their economy's not doing well", Mr Trump told reporters on Sunday. "We have lodged stern representations with the USA side".

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U.S. Commerce Secretary Wilbur Ross said there is "a very good chance" that the United States and China will reach a trade agreement. That includes giving specific dates for making purchases, and making assurances that Beijing won't hinder USA companies from gaining access to China's market.

Trump imposed tariff increases of up to 25 percent on $250 billion of Chinese imports over complaints Beijing steals or pressures companies to hand over technology. He said the warship, which he said was the destroyer the USS McCampbell, had violated Chinese and global law, infringed on Chinese sovereignty and undermined peace and stability.

The operation was not about any one country or to make a political statement, McMarr said.

The trade clash reflects American anxiety about China's rise as a potential competitor in telecommunications and other technology.

The Global Times said China's growing economy means it can "carry out a more intense boycott" of trade with the United States if needed.

A member of the US trade delegation to China, carries a folder as he leaves a hotel in Beijing, Jan. 7, 2019. The threat of US tariff hikes was the "dominating factor" for almost half, while others moved because of higher costs or tighter environmental regulation.

The talks are occurring as Chinese growth - 6.5 percent in the July-to-September period - fell to its lowest point in a decade. They complain China's companies are treated unfairly in national security reviews of proposed corporate acquisitions, though nearly all deals are approved unchanged.

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