Bejing and Washington need to resume strategic communications, a senior Chinese government advisor said Thursday, noting relations were "very unsatisfactory" and that the coronavirus had hit the implementation of their trade deal.

US-China tensions have been rising this year since the signing of a partial trade deal in January, with officials swapping barbs over the origin of the pandemic -- which first surfaced in central China and has since ravaged the global economy.

Although both countries have committed to fulfilling the agreement's terms, analysts have flagged increasing uncertainty, a recent decline in Chinese purchases of US soybeans, and a drop in US imports in the first few months of this year.

Zhu Guangyao, a State Council counsellor, told a press briefing that "objectively speaking, the epidemic has an impact on the implementation of this deal".

"But even under such circumstances, China has been emphasising that both sides should work together," added Zhu, who is also a former vice finance minister.

Under the deal, Beijing agreed to import an additional $200 billion in US products over two years, although economists question if this will happen with business activity hammered by the virus.

Officials said last month that "good progress" was being made on creating the conditions needed to make the agreement a success.

Beijing agreed to import an additional $200 billion in US products over two years, although economists question if this will happen with business activity hammered by the virus outbreak
Beijing agreed to import an additional $200 billion in US products over two years, although economists question if this will happen with business activity hammered by the virus outbreak AFP / ANDREW CABALLERO-REYNOLDS

Zhu said he expects the second stage of trade negotiations to touch on structural issues, stressing that the close connection between both economies comes from decades of hard work, and "decoupling will not happen just because some people say it will".

But he acknowledged that the current status of the US-China relationship was "very unsatisfactory because channels of communication have been in a standstill".

He said China and the US should maintain "timely communication" on key issues, adding that both sides "should resume strategic communication at various levels including in politics, diplomacy and the economy."

State Council counsellors remain bullish over China's economic recovery.

Liu Huan, also former deputy director of the Central University of Finance and Economics' school of taxation, said Thursday he expects a bounce-back in the second quarter and for consumption to spike in the third if the epidemic situation stabilises.

China logged a historic GDP contraction in the first three months.

Liu said he believes China "does not rule out the possibility of a larger fiscal deficit or stimulus", but this depends on the effectiveness of existing monetary policy.

He said ensuring employment was the priority, and China was unlikely to engage in "irresponsible quantitative easing".

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