BEIJING • A senior Chinese official said yesterday that it is difficult to proceed with trade talks with the United States while Washington is holding "a knife to China's neck", a day after both sides heaped fresh tariffs on each other's goods.
When the talks can restart would depend on the will of the US, Vice-Commerce Minister Wang Shouwen said at a news conference in Beijing.
US tariffs on US$200 billion (S$273 billion) worth of Chinese goods, and retaliatory taxes by Beijing on US$60 billion worth of US products including liquefied natural gas (LNG) kicked in on Monday, unnerving global financial markets.
"Now that the United States has adopted such a huge trade restriction measure... how can the negotiations proceed? It's not an equal negotiation," Mr Wang said, stressing that the US has abandoned its mutual understanding with China.
Chinese Foreign Minister Wang Yi also told business people at a meeting in New York that talks could not take place against the backdrop of "threats and pressure", said the Chinese Foreign Ministry.
Certain forces in the US have been making groundless criticisms against China about trade and security issues, which has poisoned the atmosphere for Sino-US ties and is highly irresponsible, Mr Wang Yi was quoted as saying, without naming anyone.
"If this continues, it will destroy in an instant the gains of the last four decades of China-US relations," he told members of the US-China Business Council and the National Committee on United States-China Relations.
Now that the United States has adopted such a huge trade restriction measure... how can the negotiations proceed? It's not an equal negotiation.
VICE-COMMERCE MINISTER WANG SHOUWEN
China also accused the US of engaging in "trade bullyism", and said Washington was intimidating other countries to submit to its will, according to a White Paper on the dispute published by China's State Council, or Cabinet, on Monday.
Several rounds of Sino-US talks in recent months have appeared to produce no breakthroughs, and fresh mid-level negotiations which had been expected in the coming weeks have been shelved after Beijing reportedly decided late last week not to send a delegation to Washington.
While Mr Wang Shouwen said he still hopes "there is a way out" if both sides treat each other with sincerity, analysts say neither side looks to be in the mood to compromise in the increasingly bitter dispute, raising the risk of a lengthy battle that could chill the global economy by discouraging business investment and disrupting trade.
In a note to clients, Mizuho Bank said: "The sharp criticism (from Beijing on Monday) suggests that China might prefer to wait out the current US administration, rather than embarking on potentially futile negotiations.
"Given these developments, it is increasingly likely that both sides will not resume negotiations for some time, at least until there is a noticeable shift in the political mood on either side."
US exporters including LNG suppliers would certainly be hurt, but Beijing's retaliation would provide opportunities to other LNG-exporting countries, Mr Wang Shouwen said, adding that Australia is an important source of the fuel for China.
"China is a big and powerful nation, so whether it is a confrontation with China economically or militarily, it would come at a huge price," the state-backed Global Times said in an editorial yesterday.
Therefore, "it is an attractive prospect for other countries including the US to coexist with China peacefully", said the newspaper, which is published by the ruling Chinese Communist Party's People's Daily.
China does not know why the US changed its mind after reaching an agreement with China on trade earlier, said Mr Wang Shouwen. He was apparently referring to talks in May, when it appeared that the two sides had sorted out a framework before the White House backed away.
Mr Luo Wen, a vice-minister at the Ministry of Industry and Information Technology, told a news conference that the government is aware some foreign firms are considering relocating out of China as the trade row threatens to heighten their risks and costs. He said the government is working to accommodate their needs and reduce their tax burdens.
However, the trade war risks disrupting global supply chains and throwing them into chaos, he said.
Senior officials also once again rejected Washington's accusations that China forces foreign companies to share their technology with Chinese joint-venture (JV) partners, adding that Beijing has passed a rule forbidding government entities from such illegal behaviour.
"The government has not forced this, and a lot of JVs are actually performing very well in China," said Mr Wang Shouwen. Citing the example of American car giant Ford, he said: "Ford produces more cars and makes more profits in China through its JV than it does in the United States."