Beijing ‘not afraid’ of a trade war with Washington

UNITED STATES (OBSERVATORY NEWS) — Chinese President Xi Jinping said on Friday that his country was willing to reach a preliminary trade deal with the United States but was “not afraid” of confrontation if needed, stressing Beijing would implement economic reforms at its own pace.

Xi rarely touches so directly on the trade war in his remarks, two days after US President Donald Trump signaled Beijing had not yet made enough concessions to reach an agreement.

The world’s two largest economies have been locked in a trade dispute for more than a year and have exchanged tariffs on hundreds of billions of dollars worth of products.

“As we have said repeatedly, we do not want to start a trade war but we are not afraid,” Xi told former US officials and other foreign dignitaries in Beijing.

“We will have a confrontation when necessary, but we are actively working to avoid a trade war,” he told the group, which included former US Secretary of State Henry Kissinger, former Treasury Secretary Henry Paulson and former Australian Prime Minister Kevin Rudd.

On October 11, Trump announced a “first phase” agreement that would address issues that are important to the United States with regard to trade with China and currency-related practices.

But more than a month later, the parties have yet to finalize the text of any agreement. US officials are demanding that China make big deals to buy agricultural products from the United States.

Senior trade negotiators held telephone talks on Saturday, which the Chinese Ministry of Commerce described as “constructive” on a preliminary agreement.

China insists the United States should abolish the tariffs it has imposed, something Trump has indicated he has not agreed to.

“I can tell you that. China is more than seeking a trade agreement,” Trump said on Wednesday. “I don’t think they are reaching the level I want,” he said.

– China “will not back down” –

The passage of Congress this week overshadowed a bill supporting Hong Kong’s pro-democracy protesters to negotiate.

“We want to work towards a first-stage agreement based on mutual respect and equality,” Xi told participants at the Bloomberg New Economy Forum.

The Chinese president warned that trade talks “may affect the outlook for the global economy”, but Beijing is taking a “positive attitude.”

Diana Shuileva, an economist at Enodo Economics, said Shi’s remarks did not mean Beijing was about to start a trade dispute but showed it was “not going down.”

She told AFP during the forum that “the style of negotiation and lack of confidence caused by Trump made him (Shi) … … convinced that there is no point in making a lot of concessions.”

Xi reiterated China’s pledge to reform its economy to introduce more openness, but noted that his country was “very cautious and tough” about it. “We cannot afford any major or fundamental mistake. If a giant ship like China capsizes, it cannot be saved,” he said.

– “Conflict or Cooperation” –

Trump launched the trade war in March 2018, demanding that China end practices deemed unfair, such as the compulsory transfer of technology from US companies and massive government support for Chinese companies.

Xi said Beijing needs to make progress in its reforms in state-owned enterprises and protect intellectual property rights. “This is not something we have to do. We do it on our own initiative,” he said.

The Chinese president said he had told IMF director Kristalina Georgieva, whom she met earlier, that China would continue on the path of financial reform and opening-up but “on the condition of ensuring the security of our country’s financial sovereignty.”

Technology is another major front in the trade war as Washington has infuriated Beijing by imposing sanctions on the telecoms giant Huawei amid US fears that its spy equipment could be used by Beijing.

Xi warned that “the technological iron curtain” would affect “the future prospects of humanity.”

Former US Treasury Secretary Paulson told the president that high-speed 5G technology could become “either a source of conflict or cooperation between the United States and China.”

“I think the key to minimizing the potential for conflict is that we develop common standards for emerging technology,” he said.

“Our two countries should cooperate for a prosperous international order,” Kissinger told the Chinese president. The former US secretary of state warned at the forum on Thursday that the trade war between the two countries could turn into an armed conflict.

Xi also referred to his “Chinese dream” of putting the giant Asian country in its rightful place on the world map. “It is not a dream of dominating or replacing others,” he said. “We are just trying to regain our place and our role in the world.”

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