(Bloomberg) -- President-elect Donald Trump’s pick of Scott Bessent as Treasury secretary may give Beijing room to negotiate with the US over their trade tensions, in part due to his moderate stance on tariffs.

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Bessent, who runs macro hedge fund Key Square Group and was nominated on Friday, has described Trump’s threats of steep levies on Chinese imports as a “maximalist negotiating position.” He has urged a phased approach to implementation, calling for tariffs to be “layered in gradually” in an interview with CNBC earlier this month.

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“This is good news for Beijing,” said John Gong, a professor at the University of International Business and Economics in Beijing who has worked as a consultant for China’s Commerce Ministry. “Wall Street has to have a seat in the Trump administration, and it got the most important one.”

For Beijing, Trump’s Treasury pick may be a moderating force in a cabinet with China hawks such as Marco Rubio as secretary of State and Michael Waltz as national security adviser. The selection has fueled a rally in currencies around the world against the dollar, as traders trim bets that the return of Trump will send tremors throughout global markets.

Amy Celico, partner at Albright Stonebridge Group, also said Bessent’s appointment would be a good sign for a Chinese government that’s looking to continue talks on bilateral and global issues.

“Naming Bessent as one of the prospective interlocutors with Chinese government should give the two sides room for this,” said Celico, who was formerly senior director for China affairs at the Office of the US Trade Representative. “But I am not saying it’ll be smooth sailing.”

Indeed, Bessent has signaled discontent with the value of the yuan, citing his firm’s research showing the currency is undervalued.

“They’ve done a big internal devaluation, they cut labor, they’ve written down real estate — very similar to what happened to the Europeans in 2011-12,” he said at a conference in June. “I think the RMB is really something that we have to investigate, the relationship between that and the dollar.”

The first Trump administration labeled China a currency manipulator in 2019, accusing the Asian nation of devaluing its currency to boost exports, before lifting the designation months later. Under such a determination, China could face possible sanctions including its firms being prohibited from competition for US government contracts.