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.
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.
