China stressed on March 26 the door for dialogue and consultation regarding trade disputes with the United States has always been open, and international trade today needs rules rather than supremacy by any one nation.
Foreign Ministry spokeswoman Hua Chunying said China is willing to negotiate with the US based on the principle of mutual respect, equality and mutual benefit to properly manage their differences.
It is time for the US to stop adopting hegemonic measures to intimidate others in areas of global trade, she said at a news briefing in Beijing.
Her comments came after US Treasury Secretary Steven Mnuchin said on March 25 that he is optimistic the US can reach an agreement with China to avoid a trade war. On March 22, US President Donald Trump signed a memorandum that could impose tariffs on up to $60 billion of imports from China, a move that poses a threat to global trade.
“Reviving talks on the China-US bilateral investment treaty would be a breakthrough in establishing a systematized arrangement for trade and other commercial activities,” said Long Guoqiang, vice-president of the Development Research Center of the State Council.
There are a number of reasons the US is very concerned about the bilateral trade imbalance, with one of the most critical factors being the influence on its employment, he said. The idea that China is “stealing” jobs from the US through exports is a one-sided perspective, he added.
“China has an immense goods trade surplus with the US, but the country’s huge trade deficit in services reminds one of the comparative advantages of each country in terms of the manufacturing and service sectors, and demonstrates the complementary traits of their differing economic structures,” Long said.
A study by the Development Research Center showed that restrictions on exports of high-tech products from the US to China undermine the competitiveness of US products in China.
The percentage of high-tech imports into the Chinese market from the US fell from 16.7 percent in 2001 to 8.2 percent in 2016. China imported $227 billion in computer chip products in 2016, with only 4 percent of them coming from the US.
Wei Jianguo, former vice-minister of commerce, said effective measures that China can take to fight back against the US involve agricultural products and high-tech companies if the country is forced into a trade war.
He cited trade affecting agricultural producers in Iowa and Indiana and high-tech giants like Boeing, General Motors and Qualcomm as potential targets.
“The entire international market is worried about a China-US trade war,” said Wei. “Once the trade war starts, Chinese exports will stumble and the imports of raw materials will be cut. It will affect the exports of many countries, including the European Union, Australia, Canada and South Korea.”
“The Association of Southeast Asian Nations is also paying close attention to the issue, for fear of the negative impact that would be caused by a trade war,” he added.
Bernard Dewit, chairman of the Belgian-Chinese Chamber of Commerce, said he is quite concerned about a possible trade war between China and the US because the world economy would suffer.
Lawrence Summers, former US Treasury secretary, stressed on March 24 that the US cannot restrain China’s rise. Instead of trying that, the US should build on its unique advantages including universities, opportunities for immigrants, and areas like Silicon Valley and entrepreneurship.
The US’ proposed trade actions have already had a ripple effect as the EU started a study on March 26 into possible limits on steel imports. EU officials say they are facing increasing imports of steel that they fear have been diverted to Europe due to US tariff decisions.
Fu Jing and Zhou Jin contributed to this story.