The US earlier implemented some US$200 billion worth of tariffs on Chinese goods. 

Talks began yesterday in Beijing and by all accounts there is increased optimism the stalemate may end.  

 

"I'm not saying there could be positive results; I think there definitely will be," a former vice commerce minister Wei Jianguo told the Washington Post. 

 

But one quick and useful bellwether to determine China's feelings is The Global Times' editorial section. 

 

A state-run paper that turns the propagandistic rhetoric up to 11 (a kind of communist Fox News for foreigners) it usually represents the more hawkish elements of China's government. 

 

Its Monday editorial urged a solution. 

 

"No matter how hard, the only choice for both countries is to explore peaceful coexistence while avoiding mutual strategic exhaustion," it said. 

 

"A win-win result for China and the US seems to deviate from the orthodoxy of games between major powers, but the zero-sum game is even tougher to play.

 "Beijing and Washington have to explore a new path." 

 

However, there is more than just a deviation from jingoistic rhetoric. 

 

Liu He, the nation's vice premier and close advisor to president Xi Jinping, made an unscheduled appearance at the talks, which were conducted at the vice-ministerial level, suggesting a keenness to force a resolution. 

 

"I really believe they want to make a deal," US president Donald Trump told a White House press conference over the weekend. 

 

"The tariffs have absolutely hurt China very badly," he claimed.

 

Trump and Xi agreed to a March deadline during their G20 sidelines talks in Buenos Aires in December. 

 

"The Chinese delegation was also much larger than the US side, according to photos of the talks, indicating the high priority the Chinese are attaching to the negotiations," Forbes wrote, though large Chinese delegations are nothing new and in the past have indicated an intention to overwhelm interlocutors in a diplomatic show of force. 

 

Importantly, any resolution could see China begin to purchase larger amounts of US LNG, among other goods such as soybeans. 

 

US treasury secretary Steven Mnuchin, in particular, wants China to import more farm products and hydrocarbons. He is less concerned with forcing China to restructure parts of its economy, unlike other hardliners within the Trump administration. 

 

Australia is China's largest LNG supplier and most US cargoes sent from the Sabine Pass plant have been third-party spot cargoes, but with Cheniere's Corpus Christi in Texas ramping up and three more export projects expected to start sales this year the US has the capacity to supply China's increasing demand. 

 

While Chinese demand may be such that there is room for both players American LNG growth is such that Canberra saw fit to include a note in 2017's Foreign Policy White Paper on the potential threat to Australia's LNG sector by US LNG ambitions.  

 

Cooperation on energy exports would be an easy win-win given China wants more LNG and the US wants global ‘energy dominance'. 

 

A détente in the trade standoff would not only allow the US to begin exporting oil and LNG to China again, but also give China enough confidence to invest more in US LNG projects. 

 

In the last week Alaska's government extended a deadline for Sinopec and other Chinese companies to consider agreements for the financing of LNG projects proposed by the state-owned Alaska Gasline Development Corp. 

 

Should the project go ahead, a further 20 million tonnes of LNG would be exported per year from Alaska with around 15MMt reserved for China. 

 

US analysis firm Stifel's analyst Ben Nolan has said China will become the world's most important LNG player and though Wood Mackenzie sees LNG demand growth slowing this year it is still miles ahead of any other economy. 

 

In a note released yesterday research director Giles Farrer said that "eeconomic slowdown, a more considered approach on coal-to-gas switching and increased domestic infrastructure availability will mean LNG demand will slow in 2019, from the 40-45% growth we have seen in 2017 and 2018, but China will still grow at around 20%, by far the largest source of LNG demand growth in the global market".

 

"In 2019 there will be more clarity on the level of ambition of Chinese domestic supply growth and the ramp-up of Power of Siberia. We are bullish about both and the competition they will provide for LNG growth potential post-2020," Farrer said.

 

Domestically, PetroChina produced 4.27cu.m of CSG from Sichuan province alone last year, a 40% increase over 2017, and evidence that the stalled Chinese shale revolution of last decade is picking up again as large state companies benefit from more experience and better technology.