China economy

China’s vice-president vows to keep ‘strategic focus’ amid mounting challenges of trade war

  • Wang Qishan makes unusual appearance at the ‘non-government’ Imperial Springs International Forum in Guangzhou
  • The closest aide to President Xi Jinping says the mainland will strive to lead ‘economic globalisation’ and open its market wider despite ongoing US trade war
PUBLISHED : Tuesday, 11 December, 2018, 4:26pm
UPDATED : Tuesday, 11 December, 2018, 6:10pm

Vice-President Wang Qishan said China will maintain its “strategic focus” and will not abandon its economic model, at a time when the country is facing an increasingly hostile external environment due to the trade war with the United States.

Wang told an event in Guangzhou on Monday that China would strive to be a leader in ‘economic globalisation’ and pledged support for the multilateral economic system.

After four decades of nearly uninterrupted economic boom, China’s growth prospects have been dampened in 2018 by the rising trade and geopolitical tensions between Beijing and Washington, fanning speculation over whether China’s growth may be stunted.

Wang, the closest aide to President Xi Jinping and a historian by training, was making a rare appearance at a “non-government” event, the Imperial Springs International Forum in Guangzhou.

We must conform to the historical trend and maintain strategic focus to adapt and lead economic globalisation.
China Vice-President Wang Qishan

At last year’s event, the most senior government speaker was Li Xi, the Communist Party Secretary for Guangdong. The presence of such a senior official is indicative of the gravity of the current geopolitical situation.

Wang told former heads of state, government officials and business leaders that China will follow its own path and open its doors wider to the outside world, according to a summary of his speech published by China's state-owned Xinhua News Agency.

“We must conform to the historical trend and maintain strategic focus to adapt and lead economic globalisation … and to maintain a rule-based multilateral trading system,” said Wang at the forum, which was attended by 200 international dignitaries, including Yukio Hatoyama, former Prime Minister of Japan and Kim Campbell, former Prime Minister of Canada.

Wang did not directly mention the US or President Donald Trump, but did imply that China is only willing to harness, but not to alter its growth model.

Since July, China and the US have employed bilateral tariffs on each other’s goods. However, a meeting between Presidents Xi and Trump at the G20 summit in Argentina earlier this month saw the two leaders agreed to a 90-day negotiating period, during which China will try to address US concerns after the committing to buying a “very substantial” amount of American exports.

The US under Trump has railed against its trade deficit with China, demanding Beijing end what it calls unfair trade practices.

The Trump administration has also complained that forced technology transfer, poor market access and intellectual property theft in China has hurt US businesses.

Despite US efforts to reduce the deficit, China’s trade surplus rose to a new high of US$35.5 billion last month, as orders were front-loaded, ahead of a threatened increase in tariffs at the start of 2019.

Exports to the US rose by 9.7 per cent year on year to US$46.2 billion in November, while imports dropped 25 per cent to US$10.6 billion, according to data published by the General Administration of Customs in China last week.

Deflation threat returns to haunt Chinese economy as risks from US trade war linger

China, meanwhile, is growing at its slowest rate in a decade, while its economy has been further hit by weakening demand from both consumers and investors.

There is also speculation that the arrest of Huawei chief financial officer Sabrina Meng Wanzhou could complicate trade talks between Beijing and Washington.

Beijing has said it is confident about reaching a trade deal with the US within the 90-day truce agreed by the two sides in Argentina on December 1, while the US’ lead negotiator Robert Lighthizer has said that the period is a “hard deadline”.

Trump’s National Security Adviser John Bolton has said that Huawei and other Chinese tech companies who are suspected of intellectual property theft or forced technology transfer will be a “major subject” of the trade negotiations, which kicked off with a phone call between senior Chinese and US officials this morning.

The event in Guangzhou, which was aimed at “advancing reform and opening-up, promoting win-win cooperation”, was organised by the Chinese People’s Association for Friendship with Foreign Countries and the Australia China Friendship and Exchange Association.