Commerce minister warns US against trade war

PUBLISHED : Sunday, 11 November, 2012, 12:00am
UPDATED : Sunday, 11 November, 2012, 5:36am

Commerce Minister Chen Deming has accused the United States of demonstrating a "cold-war mentality" after a US congressional report concluded that investments from Chinese telecommunications companies could threaten US security.

The intelligence committee of the US House of Representatives issued a report last month warning that Huawei and ZTE - two of China's largest telecommunications companies - could be used as vehicles for espionage by Beijing, citing their connections with the Communist Party.

Fast-growing foreign direct investment from China may create a "potential Trojan horse", the report said, urging US buyers to avoid purchasing telecommunications equipment from the two companies.

Both Huawei and ZTE have denied the accusations.

At a press conference at the Communist Party's 18th congress yesterday, Chen called the claims outrageous. "If you treat us as a potential Trojan horse, how would I view you?

"If the Chinese National People's Congress and the Chinese government also came asking many US companies operating in China, 'Do you belong to the Democratic Party or the Republican Party' and 'What is your relationship with them?', it would be a big mess."

During this year's election campaign, US President Barack Obama, like his Republican rival Mitt Romney, pledged to take a tougher trade stance with China. Chen appeared to play down the tension, saying "such words made during election can't be taken seriously".

Still, he said Washington had created lots of "unreasonable" trade friction during the financial crisis and said trade wars were undesirable.

"The US' exports to China have helped create more than three million jobs for the United States each year," he said. "Nobody could afford a trade war."

The minister also said the Japanese government's nationalisation of islands in the East China Sea "has, and will continue to seriously hurt", bilateral trade activities.