Chinese Stocks Rocketed Higher On Trump's Trade Tweet, But A Deal Isn't A Sure Thing

U.S. President Donald Trump and China's state-run news agency Xinhua both announced "significant progress" from the last week of trade negotiations.

Encouragingly, both sides specifically mentioned the issues of technology transfer, intellectual property protection, currency, services and agriculture. Still, the U.S. and China will need to overcome significant hurdles if they're to ink a deal resolving their long-term disagreements.

Trump said in a Sunday evening Twitter post he would delay an increase in tariffs on Chinese exports to the U.S. that was originally scheduled for March 1. "Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement," Trump tweeted. "A very good weekend for U.S. & China!"

Chinese stocks rallied following the news. The Shanghai composite soared 5.6 percent, sending the index back into bull market territory, or up more than 20 percent from a low touched in early January.

"In general it's perceived as very positive," Wang Huiyao, an advisor to the Chinese government and the president of Beijing-based think tank Center for China and Globalization, said in a phone interview on Monday. "If people think this is good for the country, the government can rally support (and be) more conciliatory, more cooperative."

However, a delay of punitive measures isn't the same as an agreement. Much of the foreign business community has been frustrated by Beijing's slowness to act on commitments made when the country joined the World Trade Organization in 2001. Last year, Trump also abruptly changed the tone on trade negotiations when both sides thought they were nearing an agreement.

What's important, analysts said, will be a timeline for implementation on any trade deal, and specific consequences if commitments are not enacted.

Even Xinhua pointed out in a Chinese-language article on Monday that, according to a CNBC translation, "negotiations become more difficult the closer they get to the end. The chance this causes greater uncertainty cannot be ruled out."

The American Chamber of Commerce in China said in a statement Monday that it's pleased with the latest developments on trade, but "what is common among all of our members is the desire to progress on the fundamental underlying issues, which will be necessary if a long-term solution is to be found."

The chamber cited a survey of its members last week that showed they "most valued greater market access for their industries; guarantees that antitrust, environmental protection, product safety, and other measures will be enforced equally against Chinese and foreign enterprises and individuals; improvements in intellectual property protection and elimination of pressure to transfer technology; and participation by foreign companies in standard setting."