‘We don’t want a trade war’: Li Keqiang calls on Trump to work with China

Chinese premier says Beijing does not want its ASEAN neighbours compelled to pick sides

PUBLISHED : Wednesday, 15 March, 2017, 11:53pm
UPDATED : Thursday, 16 March, 2017, 9:30am

Chinese Premier Li Keqiang on Wednesday called on US President Donald Trump to work with China to avoid a trade war and create “opportunities rather than trouble” for Southeast Asian neighbours caught between the two powers over the long-standing South China Sea dispute.

His remarks, made at the annual press conference at the end of the National People’s Congress, struck a positive note on Sino-US relations ahead of US Secretary of State Rex Tillerson’s visit to Beijing this weekend, the first by a top Trump administration official.

Li also pledged to establish a bond market link between Hong Kong and the mainland, while stressing the thorough implementation of “one country, two systems”. He also denied the economy was in for a hard landing and threw his support behind a united Europe.

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Tillerson is expected to pave the way for the first face-to-face summit between Trump and President Xi Jinping, a meeting that will reportedly be held at Trump’s Mar-a-Lago resort in Florida early next month.

“We don’t want to see a trade war between the two nations. That wouldn’t make our trade fairer and it would hurt both sides,” Li said.

Li said Americans stood to lose the most in a tug-of-war over between the world’s top two economies, citing studies by overseas think tanks. “Foreign-invested companies, especially those from the US, would bear the brunt of it,” he said.

Li said he felt optimistic about Sino-US relations, despite simmering tensions over a raft of issues from trade to US allegations of currency manipulation, the South China Sea and other security concerns.

He fell short of confirming the details of the Trump-Xi summit, but said both sides were in talks to prepare for the meeting.

Zhu Feng, a US affairs analyst from Nanjing University, said communication between both countries had improved recently and Li’s remarks showed Beijing was trying to create positive momentum for the summit.

“As both sides are still working on the summit, I think one of the priorities is to work out a detailed list of issues for the leaders to talk about and seek common ground on despite their often conflicting interests,” Zhu said.

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When asked about the dilemma faced by Southeast Asian countries caught in the growing rivalry between Beijing and Washington in the Asia-Pacific, Li said China did not want to see its neighbours compelled to “pick a side”. “We hope the US and China can together expand our common interests, which the members of the Association of Southeast Asian nations can benefit from,” Li said.

His comments followed fresh reports that Beijing had started new construction work on islands in disputed South China Sea waters, amid tensions between Beijing, rival claimants and Washington.

Beijing this month announced a lower-than-expected 7 per cent defence budget increase for this year, shortly after Trump promised a “historic” increase in US military spending of more than 9 per cent, or US$54 billion.

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Li said that despite disparate interests over the maritime dispute, China’s Southeast Asian neighbours would remain its regional diplomatic priority, adding that long-stalled talks between Beijing and Asean over a code of conduct in the South China Sea had made substantive progress.

Dismissing claims from Trump and other senior US administration officials that China was stealing American manufacturing jobs, he said trade with China created more than 1 million jobs in the US last year alone.

Li also touched on North Korea amid speculation of another nuclear test by Pyongyang, warning that “tensions on the Korean peninsula may lead to conflict and bring harm to all ­parties”.

But Li made no mention of the Communist Party’s national congress to be held later this year, which he said earlier would be his government’s top priority.

Additional reporting by Laura Zhou