Caixin
Aug 30, 2019 04:34 AM
ECONOMY

Beijing Stays in Contact With U.S. on Trade, Calling for De-Escalation

Trade tensions intensified over the weekend on new tariff threats. Photo: VCG
Trade tensions intensified over the weekend on new tariff threats. Photo: VCG

Chinese and U.S. trade delegations have maintained “effective” communications to create proper conditions for further negotiations, said a spokesman of China’s Ministry of Commerce, calling for a “calm attitude” in resolving the dispute.

“China has made clear that we firmly reject any escalation of the trade war and are willing to solve the problem through negotiation and collaboration with a calm attitude,” Gao Feng said Thursday at a weekly ministry press briefing.

Global investors have been closely watching the two nations’ statements and moves in the bitter trade war. Tensions ramped up recently after President Donald Trump last Friday threatened to increase tariff rates on $550 billion yuan of annual imports from China, following Beijing’s announcement of new taxes on $75 billion of annual American imports in retaliation to previous U.S. tariffs.

“China has plenty of countermeasures,” Gao said. “But under the current circumstance, what should be discussed now is about removing the new U.S. tariffs on $550 billion Chinese goods to prevent further escalation of the trade war.”

Gao’s remark was seen as a signal that China will not immediately fight back following Trump’s latest tariff threats, analysts said. Wall Street climbed Thursday morning following the news, with the Dow Jones Industrial Average rising nearly 350 points by midday.

Increasing tensions over the past week cast doubts on the next round of high-level negotiations scheduled for September in Washington. Top White House economic adviser Larry Kudlow said Thursday that he still expected Chinese negotiators to visit in September to continue the talks.

The commerce ministry’s Gao confirmed that the two sides are discussing the matter but added that the most important issue now is to create proper conditions for the two sides to continue negotiations.

“If China were to head to the U.S. for negotiations, the two sides should work together to create conditions for the talks to achieve progress,” Gao said.

China’s Vice Premier Liu He on Monday urged calm after ructions intensified over the weekend.

“We think an escalation of the trade war is against the interests of China, the U.S. and the entire world,” Liu, who is China’s top trade negotiator, said at a public event.

On the sidelines of the G-7 summit in France, Trump struck a conciliatory tone and welcomed Liu’s comment.

Before announcing the tariff hikes, Trump wrote on Twitter that he would order U.S. companies to “immediately start looking for an alternative to China,” including the relocation of manufacturing to the U.S.

Gao said China will continue improving its business environment and will welcome global businesses, including American companies, to invest and do business in China. He also urged the U.S. to remove restrictive measures against Chinese companies such as Huawei Technologies.

China’s economic fundamentals have remained “vibrant” and “resilient.” The country has plenty of policy room and confidence to maintain sound economic development despite the trade war, Gao said.

Recent media reports linked China’s social credit system with an “unreliable entities list” system and sparked speculation that they could be used to limit foreign companies in China. In response to a question, Gao said the systems will not be used to target foreign companies.

“We will take concrete efforts to protect trade secrets and intellectual property, and treat all market players fairly,” Gao said.

Contact reporter Han Wei (weihan@caixin.com)

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