Sino-US trade war not an option, says Chinese Commerce Minister

Mr Gao said that disagreements between China and the US are inevitable, but both sides know that cooperation will benefit each other while confrontation will result in mutual losses. A port in Lianyungang, in China's Jiangsu province. US President Tr
A port in Lianyungang, in China's Jiangsu province. US President Trump had threatened to slap high tariffs on Chinese goods.PHOTO: AGENCE FRANCE-PRESSE
Mr Gao said that disagreements between China and the US are inevitable, but both sides know that cooperation will benefit each other while confrontation will result in mutual losses. A port in Lianyungang, in China's Jiangsu province. US President Tr
Mr Gao said that disagreements between China and the US are inevitable, but both sides know that cooperation will benefit each other while confrontation will result in mutual losses. PHOTO: AGENCE FRANCE-PRESSE

A trade war between China and the United States should not be an option, said Chinese Commerce Minister Gao Hucheng yesterday.

Given the extent of trade and economic ties between the two countries, disagreements are inevitable, but both sides have been able to resolve issues through negotiation, said Mr Gao.

"We recognise that cooperation will lead to win-win (for both sides), while confrontation will only result in mutual losses." No matter how US policy on China shifts, Sino-US trade ties will eventually return to a "win-win" track, he added.

Mr Gao was speaking at a press briefing on the Chinese economy, where he gave an update on the progress of supply-side structural reforms and the "One Belt, One Road" initiative.

He said the inaugural "One Belt, One Road" summit to be held in Beijing in May this year will have trade connectivity as its theme.

This will be another contribution from China to global governance, after the Group of 20 summit in Hangzhou last year, he added. His remarks on Sino-US trade ties came at the end of an hour-long question-and-answer session, when reporters were told he was keen to take a question on the topic.

Mr Gao also noted that there have been concerns a trade war could break out between the world's two biggest economies.

US President Donald Trump had said on his presidential campaign trail that he would slap tariffs of up to 45 per cent on Chinese goods in order to bring back manufacturing jobs to the country and rebalance its trade with China.

He also threatened to declare China as a currency manipulator for devaluing the yuan.

Those comments sparked speculation that bilateral trade ties could deteriorate.

Mr Gao, seeking to assuage concerns, said: "If you review the history of Sino-US trade ties, you can say that despite experiencing stormy conditions, we have always been moving forward."

He cited, as examples, a US Senate Bill in 2010 aimed at punishing China for alleged currency manipulation, and how the two sides were locked in three separate intellectual property disputes in the 1990s. Each time, he said, both sides were able to resolve the issues through cooperation and negotiation.

Mr Gao also cited various trade, investment and tourism numbers to underscore how highly interconnected the two economies are.

By the end of last year, US investments in China stood at US$80 billion (S$113.8 billion), while Chinese investments in the US amounted to almost US$50 billion. Chinese investments also created 100,000 jobs in the country.

And in terms of trade, China is the biggest buyer of US goods outside North America.

Mr Gao reiterated that both countries should resolve any disputes and differences in trade ties through communication, dialogue and cooperation.

"Cooperation is the only correct option for the two countries," he said.

A version of this article appeared in the print edition of The Straits Times on February 22, 2017, with the headline 'Sino-US trade war not an option, says Chinese Commerce Minister'. Print Edition | Subscribe