China's weakened investment and increasing corporate and local government defaults may be President Xi Jinping's most difficult issue since he became the country’s top leader in 2013.

On the heels of a last-minute trade summit in Beijing and in advance of the potential implementation of new tariffs, Commerce Secretary Wilbur Ross said talks with China have made progress, and the country appears open to some of the White House's requests.

"I think they agreed to the concept of a trade deficit reduction — the questions are how much and how do you get there?" Ross told the audience at CNBC's Capital Exchange breakfast on Thursday in Washington.

Among the negotiating principles laid out by the U.S. delegation was a request for China to reduce its trade deficit with the U.S. by $200 billion in the next two years. According to a document obtained by CNBC, the U.S. requested the majority of China's deficit reduction come from purchases of U.S. goods — an idea Ross reiterated Thursday.

"Our approach has been to request individual products on which we could sell more to them than we are selling now, as opposed to them selling us less," Ross said. "Us selling more to them has more bang for the buck for our economy."