China agrees to toughen intellectual property theft penalties, a key US priority

The Chinese government said it will take a harsher stance on intellectual property theft on Sunday in a move that should please the U.S. as the two countries attempt to lock down the first phase of a possible trade deal.

The Chinese said their new guidelines would focus on "strengthening the punishment of infringement and counterfeiting" and ensuring "effective protection of trade secrets, confidential business information and source code."

CHINA SLOWDOWN MAY FORCE BEIJING TO ACCEPT TRUMP ULTIMATUM ON TRADE DEAL

Chinese tech giant Huawei is reportedly being investigated by the U.S. over allegations of intellectual property theft from multiple people and companies over a number of years.

The decision comes as President Trump says the U.S. and China are "very close" to a phase one trade deal.

"We have a deal potentially very close," the president told "FOX and Friends" on Friday morning. "He [Chinese President Xi Jinping] wants to make it much more than I want to make it. I'm not anxious to make it. We're taking in hundreds of billions of dollars in tariffs."

Trump's comments come after Xi said earlier Friday that Beijing wants to "work for a phase one agreement on the basis of mutual respect and equality."

Trump said he didn't like Xi's use of the word "equality," because the U.S. is "starting off from the floor" and China is "already at the ceiling" due to the $500 billion a year Beijing is receiving from America.

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The 17-month-long trade war, in which the U.S. has imposed tariffs on some $350 billion of Chinese goods and threatened even more, has weighed on the world's second-largest economy. It grew only 6 percent in the three months through September, the slowest since record-keeping began in 1993.

FOX Business' Jonathan Garber contributed to this report.