Don't bet on quick end to trade war, says former China minister

BEIJING • Do not bet on a quick trade deal between the world's two largest economies, according to a former top trade official for China.

US President Donald Trump and his Chinese counterpart, Mr Xi Jinping, are scheduled to join other world leaders at the Group of 20 summit in Osaka late this month. The world will be watching if the event paves the way for breaking the deadlock in trade talks.

Mr Chen Deming, China's commerce minister from 2007 to 2013, told Bloomberg Television in an interview on Thursday that he sees such chances being low.

"If the US doesn't want to go to the WTO and they talk with China with the current attitude, things will drag on," said Mr Chen, who is now head of the China Association of Enterprises with Foreign Investment, referring to the World Trade Organisation.

"In that case, we'll see who can take it on the chin. China will have to endure that, the US will have to endure that, and the whole world will have to endure that, and the global economy will go backwards."

Morgan Stanley and JPMorgan economists are among those who have warned that deteriorating US-China ties may lead the world into a recession. And the World Bank this week dialled back its global outlook, citing trade.

Aside from tariffs, the Trump administration has also moved to curb Huawei Technologies' ability to sell equipment in the United States and buy parts from American suppliers, potentially crippling one of China's national technology champions.

 
 

But that blockade will not stop China's technological advance, Mr Chen said. It will instead make China stronger.

Many Chinese students have gone overseas to study and, in a few years, they can help China close the technology gap, according to Mr Chen.

"If you go forward to that time, we will thank President Trump, because it was his policies that led us to be able to make for ourselves all the things we used to purchase from around the world," he said.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on June 08, 2019, with the headline 'Don't bet on quick end to trade war, says former China minister'. Print Edition | Subscribe