Calling China-U.S. Trade Frictions a War Is an Exaggeration: Premier Li

Chinese Premier Li Keqiang said the trade frictions between China and the U.S. shouldn’t be called a war, as the two parties continue to try to reach a mutually beneficial agreement to resolve their differences through negotiations.

“The purpose of trade is to avoid war. If you are doing business with a knife, it is not business anymore,” Li said at the Boao Forum for Asia on Thursday. Li said in general it's promising that China can avoid the outbreak of a trade war.

A U.S. trade delegation led by U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin arrived in Beijing on Thursday for another round of trade talks. The meeting made new progress on the text of an agreement to end the two country’s trade disputes, the official Xinhua News Agency reported Friday. Vice Premier Liu He, China’s chief trade negotiator, is due to lead a trade delegation to Washington next week for another round of talks.

This year marks the 40th anniversary of the establishment of diplomatic relations between China and U.S. While there have been changes in the relationship over the past four decades, it has developed steadily, Li said. In this spirit, a mutually acceptable solution to current trade frictions between the two countries should be resolved through negotiations, he said.

The U.S. has postponed a planned increase in the tariff rate on $200 billion of Chinese imports that was to have taken effect on March 1, as substantial progress was made in the trade talks in late February.

Since July, China has imposed tariffs on a total of $110 billion worth of U.S. imports and the U.S. has imposed tariffs on $250 billion worth of Chinese goods.

In October, the International Monetary Fund downgraded its projection on the world economic growth this year to 3.5% from 3.7%, citing in particular the effect of on-going trade frictions between China and the U.S.

Contact reporter Liu Jiefei (jiefeiliu@caixin.com)