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Chinese vice-premier Liu He, who read a letter from Chinese president Xi Jinping, cited the deal as an example of how the two countries could resolve issues through dialogue and “mutual respect.”

The pact “is good for China, for the U.S. and for the whole world,” Liu said through an interpreter.

The world is now at a critical crossroads in which it must make a strategic choice about its way forward, Liu said, adding he hoped the initial deal would help build trust between the two countries. “Cooperation is the only right choice.”

In a deal that Washington has described as the first phase of a more comprehensive pact, Beijing committed to buying an additional US$200 billion in American goods over the next two years, including US$40 billion to US$50 billion in agricultural products.

China also pledged to tighten its rules on intellectual property protection, pirated goods and theft of commercial property and to take steps to allow companies to operate within its vast market without any pressure to transfer their technology. The pact also calls on Beijing to avoid currency manipulation and to open its $40 trillion financial services sector to U.S. companies.

This probably falls into the category of managed trade rather than free trade

However, it does little to address subsidies or China’s system of state-owned enterprises, which have been blamed for creating an unfair global playing field. Officials have said those issues will be taken up in “Phase 2” of the talks though it is unclear when those will begin.