President Donald Trump sounded optimistic about trade talks on Sunday, in part because he believes China is motivated by its slowing economy to make a deal.

"I think China wants to get it resolved. Their economy's not doing well," Trump told reporters at the White House on Sunday, according to Reuters. "I think that gives them a great incentive to negotiate."

"The China talks are going very well," he added.

The formal talks began this week in Beijing and face a March 1st deadline that's kept financial markets on edge.

China's central bank on Friday cut the amount of reserves banks are required to hold, the latest move by the government to stimulate the country's economy. A reading of manufacturing activity in China for December showed a contraction for the first time in 19 months, alarming investors about slowing economic growth there amid the trade war. Both U.S. and China equity markets have been hit hard the last three months on fears that the world's two biggest economic powerhouses are slowing.

It's unclear whether the March deadline could be extended if progress is being made. Trade Representative Robert Lighthizer said last month it was a hard deadline and new tariffs would be imposed if the talks don't end with an agreement by then.

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