China won’t back down in trade war with US: commerce minister

In Beijing’s strongest response yet, key official says: ‘They don’t know the history and culture of this unyielding nation’

PUBLISHED : Wednesday, 10 October, 2018, 12:04am
UPDATED : Wednesday, 10 October, 2018, 8:44am

China will not cave in to US demands even if it faces further tariffs on its exports, China’s Commerce Minister Zhong Shan has said, signalling Beijing’s uncompromising stance in dealing with US.

“There is a view in the US that so long as the US keeps increasing tariffs, China will back down. They don’t know the history and culture of China,” Zhong said, in a statement published by Bloomberg News.

“This unyielding nation suffered foreign bullying for many times in history, but never succumbed to it even in the most difficult conditions. China doesn’t want a trade war, but would rise up to it should it break out.

“The US should not underestimate China’s resolve and will.”

This is Beijing’s strongest response yet to the trade war following a release of a white paper last month detailing its stance on the trade war, in which China blamed the US for creating the tensions and painted itself as a promoter of free trade.

The strong comments from Zhong, whose ministry is in the front line of any possible talks with the US, coincide with a rapid deterioration in the ties between Beijing and Washington.

Companies and consumers know best whether or not they have been taken advantage of
China’s Commerce Minister Zhong Shan

US Secretary of State Mike Pompeo, on a brief visit to Beijing on Monday, had a testy exchange with Chinese Foreign Minister Wang Yi.

Wang told Pompeo the US had hurt “mutual trust” and must stop “misguided actions” against China, while Pompeo said there were “fundamental disagreements” between the two powers.

Prospects for Beijing and Washington to de-escalate their trade tensions are not bright.

The two sides have locked horns in levying punitive tariffs against each other and there are gaping differences over a slew of issues from intellectual property rights to the role of state-owned enterprises.

The US initially imposed a 25 per cent tariff on US$50 billion worth of Chinese imports, and in September added a 10 per cent tariff on an additional US$200 billion of Chinese products, with the tariff rate set to rise to 25 per cent on January 1 if China does not make trade concessions.

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US President Donald Trump has also threatened to extend punitive tariffs to all Chinese imports.

China retaliated with a 25 per cent tariff on US$50 billion of US imports and variable tariffs of 5 per cent to 10 per cent on a further US$60 billion of US imports.

Washington is demanding China change its trade practices of forcing US businesses to transfer technologies and of subsidising state-owned enterprises.

Zhong reiterated Beijing’s line that China does not steal technology from US firms.

“I want to emphasise that China’s laws and regulations do not contain any requirement for technology transfer and that companies’ purchases of technologies and patents are pure market behaviour,” he said.

“China’s economic development, and science and technological progress are owed to reform and opening up and the endeavours of the Chinese people.”

As US turns up heat on China, trade war moves beyond tariffs to new battlefronts

Zhong also argued that China never “took advantage of the US” even as the country ran a record trade surplus of US$31.05 billion with the US in August.

“If one side had been taken advantage of all the time, could such business relations have continued? Companies and consumers know best whether or not they have been taken advantage of,” Zhong said.

The conflict between the two countries has now gone beyond trade, with Trump’s accusations that China is attempting to interfere in the 2018 US midterm congressional elections. Vice-President Mike Pence also stepped up the attack by condemning Beijing for using “every tool at its disposal” to undermine the US political system.

Pence also warned American companies, including tech giant Alphabet, which owns Google, to disengage from China.