No winners in US-China trade war, warns Beijing

Chinese media says an expected order from US President Donald Trump to investigate supposedly unfair trade practices will "poison" relations between the two countries.

It urges dialogue, says issue cannot be used to crank up Chinese pressure against N. Korea

There is no future in a trade war between China and the United States, and the issues of trade and North Korea are not linked, China said yesterday, hours before US President Donald Trump was to instruct his top trade adviser to decide if there is cause to take action against China over unfair trade practices.

"Fighting a trade war has no future. There will be no winner, and everybody will lose," Chinese Foreign Ministry spokesman Hua Chunying told reporters yesterday, urging dialogue and consultation as the way to resolve differences.

Such a US investigation will "poison" the overall China-US relationship, the China Daily also warned.

In signing an executive memo (early today in Singapore), the President is basically leaving US Trade Representative Robert Lighthizer to consider whether to investigate China's intellectual property (IP) policies, especially the practice of forcing US companies operating in China to transfer technological know-how. An investigation could take as long as a year.

Dr Peter Navarro, the director of the White House National Trade Council, is a long-time critic of Chinese trade practices.

Writing in the USA Today yesterday, he said: "With this action, the President is demonstrating his strong commitment to using all appropriate means to ensure that foreign countries do not plunder America's treasure trove of IP."


US President Donald Trump and Chinese President Xi Jinping (right) meet on the sidelines of the G20 Summit in Hamburg, Germany, on July 8, 2017. PHOTO: REUTERS
 

The annual cost to the US economy of several categories of IP theft exceeds US$225 billion (S$306 billion), according to a report this year by the IP Commission titled The Theft Of American Intellectual Property. China, including Hong Kong, accounted for 87 per cent of all counterfeit goods seized in 2015, it said. The value of pirated US software is estimated at US$18 billion.

 

Given the recent tensions on the Korean peninsula, which followed North Korea's two intercontinental ballistic missile tests last month, the US has tried to leverage on the trade probe to put pressure on Beijing to rein in Pyongyang's nuclear and missile programmes.

Mr Trump said last week he was willing to soften his stance on the trade question if Beijing tried harder with Pyongyang.

"I think China can do a lot more (about North Korea)... If China helps us, I feel a lot differently towards trade," he told reporters at his golf resort in Bedminster, New Jersey, while on a holiday.

But the Chinese insist the two issues cannot be linked.

"It is not appropriate to use one issue as a tool to keep pressure on the other issue," Ms Hua said.

Using trade as a bargaining chip in dealing with China will backfire on the US, the English-language China Daily said yesterday.

"Instead of advancing the United States' interests, politicising trade will only exacerbate the country's economic woes and poison the overall China-US relationship."

An editorial in Economic Daily, a state-run newspaper under China's State Council, also argued that the trade probe will do more harm than good, whether as a new policy direction or a negotiation tactic.

"Instead of pushing the blame to China, both sides should open up new areas of trade cooperation through dialogue in order to reverse the current trade imbalance."

A version of this article appeared in the print edition of The Straits Times on August 15, 2017, with the headline 'No winners in US-China trade war, warns Beijing'. Print Edition | Subscribe