Xi Jinping-Donald Trump hold talks over telephone amid trade tensions

Chinese President Xi Jinping on Tuesday held telephone talks with his US counterpart Donald Trump to resume a suspended dialogue programme aimed at improving bilateral economic ties, amid tensions over their huge trade imbalance.

The phone call between the two leaders came as the Trump administration threatened tough action against China including punitive tariffs, sanctions and even a trade war.

Tensions have escalated between Beijing and Washington in recent months, with China last Friday reporting a record $275.8 billion trade surplus with the US, contrary to Trump s goal to narrow the US trade deficit with China, Hong Kong- based South China Morning Post reported.

The two leaders discussed bilateral trade and the situation on the Korean Peninsula, especially the talks between the South and North Koreas to bring down the tensions, Chinese Foreign Ministry spokesman Lu Kang told media here.

They believe that this relationship is quite important, Lu said.

The two sides need to maintain high-level contacts, bring the four high-level dialogue mechanisms between them into full play, and hold the second round of dialogues at a proper time, Xi told Trump, state-run Xinhua news agency reported.

The phone call came amid strengthening of efforts to keep China-US trade relations right on track and at a time when tensions on the Korean Peninsula have shown signs of easing as senior officials from Pyongyang and Seoul met face-to-face on the borders earlier this month in what was their first direct talks in more than two years.

The economies of China and US are large and the differences between the two countries inevitable and natural, Lu quoted President Xi as saying.

The two countries should in a constructive way enlarge the pie of cooperation and properly settle the difference in economic relations and trade, he said.

As economic and trade cooperation brings tangible benefits to both peoples, the two countries should adopt constructive measures to properly settle economic and trade issues of mutual concern by opening up the market to each other and "making the cake of cooperation bigger," Xi added.

Xi also called for advancing cooperation between the two militaries, and in law-enforcement, drug control, cultural and people-to-people exchanges and cooperation at local levels, as well as close communication and coordination on major international and regional issues.

He said China welcomes the "positive signs" in the Korean Peninsula as the South and North Koreas began talks to ease tensions.

Trump said he attaches great importance to China which plays important role in Korean Peninsula nuclear issue, the Xinhua report said.

Trump said the US side attaches great importance to its relations with China as well as to the US-China cooperation.

The US is willing to work with the Chinese side to enhance bilateral exchanges at all levels, expand pragmatic cooperation, and properly handle problems in bilateral trade so as to achieve even greater results in bilateral relations, Xinhua quoted Trump as saying.