US violating global trade rules: China V-P

Chinese Vice-Premier Liu He said China hopes "the two sides would work together to safeguard the overall stability of China-US economic and trade relations".
Chinese Vice-Premier Liu He said China hopes "the two sides would work together to safeguard the overall stability of China-US economic and trade relations". PHOTO: REUTERS

China will defend its national interests, Liu He adds during phone call with US Treasury chief Steve Mnuchin

Chinese Vice-Premier Liu He has accused the United States of violating international trade rules in its inquiry into intellectual property and declared that China would defend its national interests.

He was speaking with US Treasury Secretary Steve Mnuchin in a phone call yesterday in which he also said the US move was "detrimental to China's interests and not conducive to US and global interests", Xinhua state news agency reported.

However, on a more conciliatory note, Mr Liu, who is a close ally of President Xi Jinping, also said China hopes "the two sides would work together to safeguard the overall stability of China-US economic and trade relations".

Mr Liu's remarks came after US President Donald Trump last Thursday announced plans to impose tariffs of up to US$50 billion (S$66 billion) to compensate for what the US deems as China's predatory economic practices, determined by an investigation by the US Trade Representative.

It has up to 15 days to come up with a list of Chinese products it intends to target with tariffs.

The move last week followed an earlier one by Mr Trump to impose tariffs on steel and aluminium.

READY TO DEFEND ITS INTERESTS

China has already prepared, and has the strength, to defend its national interests.

CHINESE VICE-PREMIER LIU HE


WHERE IT HURTS

If I were the government, I would probably hit soya beans first, then hit cars and planes.

MR LOU JIWEI, chairman of the National Council for Social Security Fund, saying the response from the Chinese Commerce Ministry was relatively weak.


STILL MANOEUVRING

I take it as a signal that both sides are still trying to work things out.

MR KEVIN RUDD, former Australian prime minister, noting that both the US measures and Chinese countermeasures did not go to the core of trade and economic interests of either side.

Mr Trump wants China to reduce its trade surplus with the US which was US$375 billion last year.

China last Friday said it was preparing its own retaliatory tariffs on 28 American products that it imports, ranging from fresh fruit and wine to steel pipes and recycled aluminium, worth about US$3 billion.

However, former Chinese finance minister Lou Jiwei said this response from the Commerce Ministry was "relatively weak".

"If I were the government, I would probably hit soya beans first, then hit cars and planes," said Mr Lou, now chairman of the National Council for Social Security Fund. He was speaking at the annual China Development Forum that began yesterday.

China imports more than a third of all US soya beans, which accounted for US$12.4 billion of the US$19.6 billion worth of US agricultural exports to China last year.

Any Chinese penalties on US farm products would hurt the struggling US farm sector, reported Reuters, adding that tariffs on soya beans would hurt Iowa, a state that had backed Mr Trump in the 2016 presidential elections.

China is also a huge customer of US aircraft maker Boeing which last November said one out of four planes rolling off its assembly lines was delivered to Chinese clients.

Also speaking at the forum yesterday, former Australian prime minister Kevin Rudd noted that both the American measures and Chinese countermeasures did not go to the core of trade and economic interests of either side.

"I take it as a signal that both sides are still trying to work things out," he said.

British economist Nicholas Stern, speaking to reporters at the forum, warned against a trade war, saying it would be very bad for the world as it would decrease its rate of growth and lead to its decline.

US stock markets on Friday had their worst week in two years after the Chinese announced their proposed countermeasures.

The Dow Jones Industrial Average closed down 424 points or 1.77 per cent, shedding a total of 1,100 points in the last two trading days. The Standard & Poor's 500-stock index was down 2.1 per cent while Nasdaq fell 2.4 per cent.

A version of this article appeared in the print edition of The Sunday Times on March 25, 2018, with the headline 'US violating global trade rules: China V-P'. Print Edition | Subscribe