Top US and Chinese trade officials return to the bargaining table on Wednesday, with extra tension in the atmosphere amid Washington's sweeping prosecution of Chinese telecoms giant Huawei.

The world's two largest economies are battling for nothing less than future dominance in critical high-tech industries, according to US Trade Representative Robert Lighthizer, the lead US negotiator.

A little over three years ago, Beijing launched a strategic plan dubbed "Made in China 2025" that aimed to make the nation the global leader in aerospace, robotics, artificial intelligence, new-generation autos and other areas -- sectors US officials say now represent the "crown jewels" of American technology and innovation.

US President Donald Trump has repeatedly said he favors a healthy Chinese economy but not at the expense of American business and know-how.

In specific, US officials are attacking Chinese trade practices they say are unfair, spotlighting the forced transfer of American technology through requirements that foreign companies form joint ventures with local firms, as well as the alleged theft of American intellectual property through hacking.

To pressure Beijing, the White House has slapped tariffs on $250 billion in Chinese imports.

And Trump is poised to more than double US duty rates on $200 billion in goods from China to 25 percent on March 2 should the talks fail.

Beijing has responded by slapping duties on virtually every product it buys from the United States, or about $110 billion in exports.

Given the complexity of issues, a finished agreement is unlikely to emerge from the two days of talks in Washington this week.

But US Treasury Secretary Steven Mnuchin said Tuesday he expected "significant progress," and noted the governments have another month left in the 90-day truce declared in December.

- Huawei unrelated? Sure it is... -

A final agreement seemed even more distant on Monday after the US Justice Department announced two indictments of the Chinese telecommunications giant Huawei on charges of stealing trade secrets, fraud, obstruction of justice and of a top executive accused of violating US sanctions on Iran.

But US officials insist the trade talks and Huawei prosecutions are not related.

"Let me be clear. Those are separate issues," Mnuchin told Fox Business, repeating comments made Monday by Commerce Secretary Wilbur Ross.

But Monica de Bolle, senior fellow at the Peterson Institute for International Economics, said Tuesday the Huawei case could only complicate matters in the trade negotiations.

"Of course the Huawei issue does make the trade negotiation much more difficult. There is no doubt about that," she told AFP.

"The Huawei issue could make a kind of breakdown at some point more likely."

Last year, US sanctions on another Chinese telecoms company, ZTE, sent waves through the trade negotiations, which produced no breakthrough.

Trump later intervened to modify the penalties, allowing ZTE to avoid collapse.

In a sign the sides have are hopeful of making progress, Harvard-trained Chinese Vice Premier Liu He is due to meet Trump during this week's talks.

Trump so far has projected optimism, believing Washington has the upper hand given China's weakening economy.

Last year, the Asian country recorded its slowest growth in nearly 30 years, making the US trade war scarcely a welcome development.

But Trump also may appear weakened after agreeing last week to end a five-week government shutdown without extracting any concessions from opposition Democratic lawmakers in a battle over building a wall on the Mexican border.

"The danger here is that other countries will conclude Trump is a paper tiger," said Edward Alden, senior fellow at the Council on Foreign Relations.

"He blusters and takes very strong public positions, puts himself in situations he cannot win, and then meekly backs down and declares victory," Alden added.

"It will reinforce that argument that China's best strategy is to wait and to stonewall and Trump will back down."

Key figures in US-China trade talks
Washington/Beijing (AFP) Jan 30, 2019 - The next round of US-China trade talks will resume Wednesday and Thursday in Washington to try to find a way out of the tariff battle between the two powers.

Here is a look at all the presidents' negotiators representing Xi Jinping and Donald Trump:

- China's economic pilot Liu He -

Liu He, 67, leads the Chinese negotiating team. An influential economic adviser to Beijing since Xi came to power, Liu emerged from the shadows in February 2018 when he was sent to Washington to try to avert the trade war with Trump. He then was appointed to the post of vice premier in March, responsible for steering Chinese economic policy.

His profile contrasts with the usual resume of a top Chinese official: he is an economist who graduated from the prestigious US university Harvard.

Seen as pragmatic, Liu is considered the leader of the recent movement towards rebalancing the Chinese economy to rely on domestic consumption, services and technological innovation for growth rather than exports.

- Yi Gang, reformist central banker -

Yi Gang, 60, governor of the People's Bank of China (PBOC), is a prominent member of the delegation. Yi, who speaks English fluently, spent 15 years in the United States, where he earned a PhD in economics from the University of Illinois and then taught at a US college.

He joined the Chinese central bank in 1997, becoming deputy governor in 2008, before taking the top leadership role last year -- a post under tight government control.

Associated in recent years with the gradual liberalization of lending rates and the easing of the tight yuan exchange rate, Yi is distinguished by his statements very favorable to the free market, even defending increased openness to foreign investors.

- Robert Lighthizer, Trump's trade adviser -

US Trade Representative Robert Lighthizer, 71, is leading the American negotiating team, taking over from Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin, who did not deliver on a breakthrough.

Lighthizer stays out of the limelight but shares President Donald Trump's mistrust of China and believes it poses a threat to US economic power. And he has emerged as the US strongman in the ongoing trade negotiations, determined to force changes in Beijing's economic policies.

He led the contentious talks to revamp the North American Free Trade Agreement between the United States, Canada and Mexico, now dubbed the United States-Mexico-Canada Agreement, or USMCA.

His goal in the talks is to force the Asian giant to put an end to trade policies the US deems "unfair," especially the theft or forced transfer of American technology, obliging US firms to form joint ventures with local partners, and state subsidies for industry.

Prior to being named US Trade Representative in May 2017, Lighthizer was a specialist in international trade law for more than 30 years and is a veteran of trade negotiations with Japan in the 1980s.

- Peter Navarro, hardline anti-China voice -

Peter Navarro, 69, a Harvard-trained economist has long railed against the threat from Beijing. He has advised Trump since his upstart presidential campaign, after he gained Trump's attention with his 2011 book "Death by China" painting the country as a serial trade cheater, subsidizing export-oriented industries and manipulating its currency.

He pushed Trump to renegotiate NAFTA and vigorously defended the punitive tariffs imposed on US imports of steel and aluminum, a protectionist measure that prompted the departure of Trump's former chief economic adviser, Gary Cohn, who was more pragmatic than dogmatic and highly respected by financial markets.

At the end of 2016, Donald Trump appointed Navarro as head of the newly-created White House National Trade Council.

However, his outspoken comments in previous meetings and reports that he sparred with other US officials, caused him to be left on the sidelines of some talks.

- Steven Mnuchin, more moderate? -

In the spring of 2018, US Treasury Secretary Steven Mnuchin led the US delegation sent to Beijing to advance trade negotiations -- but with little success. His influence in the talks seems to have decreased significantly since then.

Seen as counter-balancing Navarro's hardline stance, this former Goldman Sachs executive, 56, supports free trade and offers a more moderate voice on China.

He said Tuesday he expected "significant progress" at this week's talks.

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US, China resume high-stakes poker in trade talks
Washington (AFP) Jan 27, 2019
With a month left in their truce, senior US and Chinese officials will meet in Washington this week, hoping to move toward a bargain to end their unprecedented trade war. Beijing's trade envoy, Chinese Vice Premier Liu He, will lead a 30-person delegation at the invitation of US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer, who is heading up the American effort. At a meeting in Argentina last month, US President Donald Trump and his Chinese counterpart Xi Jinping ... read more