BEIJING • China wants to work out an initial trade pact with the United States and has been trying to avoid a trade war, President Xi Jinping said yesterday, but is not afraid to retaliate when necessary.
Economists have warned that a prolonged dispute between the world's two largest economies is elevating risks to the global economy by disrupting supply chains, curtailing investment and curbing business confidence.
"We want to work for a Phase 1 agreement on the basis of mutual respect and equality," Mr Xi told representatives of an international forum, according to a pool report. "When necessary we will fight back, but we have been working actively to try not to have a trade war. We did not initiate this trade war and this is not something we want."
Mr Xi was responding to questions from representatives of the New Economy Forum organised by Bloomberg at the Great Hall of the People in Beijing.
Global financial markets retreated this week on fresh fears that the trade talks could flounder, with US President Donald Trump expected to sign into law two Bills backing protesters in the Chinese-ruled city of Hong Kong.
Concerns of a broader deterioration in Sino-US ties weighed on markets this week. US Navy warships twice sailed near islands claimed by China in the South China Sea in recent days, angering Beijing.
Completion of a Phase 1 trade deal could slide into next year, trade experts and people close to the White House have told Reuters, with Beijing asking for more extensive tariff rollbacks and Washington countering with increased demands of its own.
Delays would bring only more trouble, said Mr Fred Hu, founder of China-based global investment firm Primavera Capital Group. "The longer the time it takes, the more variables are there, such as the Hong Kong issue," Mr Hu told Reuters on the sidelines of the Bloomberg forum.
During the meeting with forum delegates, Mr Xi also said that China was willing to work with the US on expanding cooperation in innovation, reported state broadcaster CCTV.
"No country can become an independent innovation hub, or enjoy the fruits of innovation by itself. The fruits of innovation should benefit the world, it should not be like treasure buried in the mountain," Mr Xi reportedly said.
China has invited top US trade negotiators for a new round of face-to-face talks in Beijing, The Wall Street Journal said, citing unidentified sources. It added that Beijing hoped the talks could take place before next Thursday's US Thanksgiving holiday.
US officials have indicated willingness to meet but have not committed to a date, it added.