China's state-run media hailed the trade war truce with the United States as "momentous" on Monday but warned of complex negotiations ahead, even as President Donald Trump said Beijing agreed to cut car tariffs.

Asian stock markets opened higher after US President Donald Trump and Chinese leader Xi Jinping agreed on the sidelines of a G20 summit in Argentina at the weekend to hold off on imposing new tariffs while negotiators seek a deal.

Trump announced another apparent breakthrough late Sunday on Twitter, saying China had agreed to "reduce and remove" tariffs on cars.

The ceasefire follows months of tensions and punitive custom duties on hundreds of billions of dollars worth of goods that raised fears of an escalation that would harm the global economy.

Both sides gained from hitting the pause button, with Trump avoiding further hits to US agricultural exports, and Xi staving off an escalation of the pressure that higher tariffs would place on his country's slowing economy.

China's nationalist Global Times tabloid welcomed the Buenos Aires agreement as a "momentous step forward" that brings "huge potential for fair trade".

"It is hoped that the trade teams from both countries will reach as many practical agreements as possible and as quickly as possible to hasten China-US cooperation," the daily said.

The Communist Party's official mouthpiece, the People's Daily, described the announcement as an "important consensus" that shows the two countries' common interests "outweigh differences".

- 'Worse before it gets better' -

Asian stock markets opened on a high note on Monday, with Tokyo up by more than one percent and Hong Kong and Shanghai rising more than two percent.

After being spooked by the conflict, investors returned to buying following the long-awaited meeting between the two presidents.

But observers warned there were still major issues that need to be resolved, including access for US companies and intellectual property protection.

"We anticipate that things are still likely to get worse before they get better, and that the negative sentiment impact created by the trade narrative will create additional market volatility," said Kerry Craig, global market strategist at JP Morgan Asset Management.

Under the agreement, Trump is shelving a plan to raise tariffs on $200 billion worth of Chinese imports from 10 percent to 25 percent from the start of next year -- but the hike will kick in if negotiators fail to reach a final deal within 90 days.

The United States has slapped 25 percent tariffs on another $50 billion worth of Chinese imports and they remain in effect despite the truce.

China has hit back with similar tariffs on $110 billion worth of goods made in the United States.

The US leader tweeted on Sunday that China had agreed to scale back tariffs on cars, but he did not explain which would be removed and which would be reduced.

Beijing had reduced auto import duties from 25 percent to 15 percent in July. But it added a 25 percent tariff on US cars as trade tensions soared, bringing them to 40 percent.

Trump wants China to do more to reduce its $335 billion trade surplus with the United States, further open up its economy and take action to curb the alleged theft of intellectual property.

The Global Times said the two sides would discuss expanding market access, protecting intellectual property and "joint control of cyber crime".

"Both parties agree that they will endeavour to have this transaction completed within the next 90 days," the newspaper said, invoking a deadline that only the US side had mentioned on Saturday.

- 'No magic wand' -

The White House said Saturday that China had agreed to purchase a "very substantial" amount of agricultural, energy, industrial and other products from the United States.

Trump and Xi will "immediately" begin talks on "structural changes" affecting forced technology transfer, intellectual property protection and cyber theft, it added.

The state-run China Daily struck a cautious tone.

"No magic wand has been waved to make the differences between the United States and China vanish overnight," the newspaper said.

The Buenos Aires deal shows that both sides are aware that the tariffs could damage the global economy, it said.

"But given the complexity of interactions between the two economies, the rest of the world will still be holding its collective breath while it waits to see if the series of constructive plans that are in the works can put bilateral relations back on a cooperative rather than confrontational track," the China Daily said.

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J.P. MORGAN CHASE & CO

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US slams harmful China trade policies, threatens auto tariffs
Washington (AFP) Nov 28, 2018
US Trade Representative Robert Lighthizer on Wednesday slammed Beijing for failing to offer "meaningful reform" on aggressive trade policies that harm US workers and industry, and threatened tariffs on Chinese autos. The latest trade threat against China comes days before President Donald Trump is due to meet with Chinese leader Xi Jinping at a G20 summit in Argentina to defuse the ongoing trade conflict between the world's top two economic powers. Instead, Lighthizer's statement escalated the d ... read more