China urges ‘calm and rational’ resolution to trade war

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    Escalating. A file photo of employees working on the production line of a television factory in Shenzhen, China. The United States and China have been locked in an escalating trade war for over a year. They have levied punitive duties on hundreds of billions of dollars of each other’s goods, roiling financial markets and threatening global growth. (Reuters Photo)
    Escalating. A file photo of employees working on the production line of a television factory in Shenzhen, China. The United States and China have been locked in an escalating trade war for over a year. They have levied punitive duties on hundreds of billions of dollars of each other’s goods, roiling financial markets and threatening global growth. (Reuters Photo)

    BEIJING- China hopes Beijing and Washington will resolve their trade dispute “with a calm and rational attitude”, Vice Commerce Minister Wang Shouwen said on Sunday, ahead of talks in two weeks between the two sides.

    The United States and China have been locked in an escalating trade war for over a year. They have levied punitive duties on hundreds of billions of dollars of each other’s goods, roiling financial markets and threatening global growth.

    A new round of high-level talks between the world’s two largest economies is expected in Washington on Oct. 10-11, led from the Chinese side by President Xi Jinping’s top economic adviser, Vice Premier Liu He.

    Wang, who has been part of China’s negotiating team with the United States, told a news conference that Liu would go to Washington for the talks the week after China’s National Day holiday, which ends on Oct. 7.

    He said he hoped both sides would find ways to resolve their differences. “We believe this will benefit both countries’ people and the world,” he added.

    The Trump administration is considering radical new financial pressure tactics on Beijing, including the possibility of delisting Chinese companies from US stock exchanges.

    Sources told Reuters on Friday that the move would be part of a broader effort to limit US investments into Chinese companies, in part because of growing security concerns about their activities.

    China has hit back at US criticisms about lack of market access for US firms, forced technology transfers and poor protection of intellectual property.

    Wang reiterated that China will open up more sectors of the economy to foreign investors, and its policy of protecting foreign companies’ rights in the country will not change.

    Earlier, Commerce Minister Zhong Shan told the news conference in Beijing that Chinese companies faced many difficulties due to the trade frictions which he said posed unprecedented trade challenges to the country.

    China would expand imports, and measures to stabilize trade would yield positive results, he said without giving details.

    The trade war has added to tensions between China and the United States, whose ties are also strained over US criticism of human rights issues in China, including protests in Hong Kong, the disputed South China Sea and US support for Chinese-claimed Taiwan.

    The Chinese government’s top diplomat said on Friday that tariffs and trade disputes could plunge the world into recession and Beijing was committed to resolving them in a “calm, rational and cooperative manner”.

    The dispute has taken its toll on the Chinese economy.

    China’s exports unexpectedly fell in August as shipments to the United States slowed sharply, pointing to further weakness in the world’s second-largest economy and underlining a pressing need for more stimulus.

    Beijing is widely expected to announce more support measures in coming months to avert the risk of a sharper economic slowdown as the United States ratchets up trade pressure.

    Meanwhile, factory activity surveys in China pointed to slight improvement in September as domestic demand picked up, but analysts believe the gains will be short-lived as the property market cools and Sino-US trade tensions remain elevated.

    Persistent weakness in China’s vast manufacturing sector has reinforced market expectations that Beijing needs to roll out more support measures to cushion the country’s worst economic slowdown in decades, even if that risks racking up more debt.

    Total new orders, including those from home and abroad, did swing back to growth in September for the first time in five months, the official PMI showed, but the expansion was marginal.

    Moreover, export demand remained weak, with orders falling for the 16th straight month, albeit at a milder pace.

    The Peoples’ Bank of China has lowered banks’ reserve requirements seven times since early 2018 to free up more funds for lending. China also trimmed its new benchmark lending rate in September for the second month in a row.

    But analysts note monetary policy easing has been more cautious than in past downturns, likely due to concerns about rising debt and financial risks, particularly involving the property market. – Reuters