China softens tone on trade stance after US reversal on ZTE ban

Commerce ministry holds out olive branch as it stresses willingness to buy more US goods if both sides ‘meet halfway’

PUBLISHED : Thursday, 07 June, 2018, 12:51pm
UPDATED : Saturday, 09 June, 2018, 6:54pm

China softened its tone in the trade stand-off with the United States on Thursday, calling for cooperation to avoid the situation escalating.

In a press briefing, the Ministry of Commerce refrained from repeating earlier warnings that China would ditch its agreement to buy more American goods if the US went through with plans to slap tariffs on Chinese imports.

Gao Feng, the ministry’s spokesman said details on the agreements reached in the latest round of trade talks were pending final confirmation by both sides.

“China is willing to increase its imports from the US on the presumption that both countries meet halfway” said Gao.

He did not respond to press queries as to when the two countries would hold further talks but said China was willing to seek dialogue and expand cooperation to address conflicts.

The statement also comes after Chinese telecoms giant ZTE agreed to pay US$1.4 billion to lift the US Commerce Department ban on buying from US suppliers.

After talks in Washington in mid-May, China agreed to buy “meaningful” quantities of American agricultural and energy products, while the US announced it would put plans to impose 25 per cent tariffs on up to US$150 billion of Chinese imports on hold.

But the truce proved short lived. At the end of last month the White House revived fears of a full-blown trade war by putting tariffs back on the table ahead of another round of talks in Beijing.

After the latest trade talks, media reports said that China had agreed to buy US$70 billion of goods from energy and agricultural firms – something that the commerce ministry refused to confirm or deny in its statement on Thursday.

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It said: “In order to carry out the consensus reached in Washington, both countries made positive and concrete progress after candid and in-depth discussions over the weekend in Beijing”.

Tensions between Beijing and Washington have spilled over to security issues, with both sides stepping up their rhetoric and conducting shows of military strength in the South China Sea.

Beijing is also wary about the opening of the new office of the American Institute in Taiwan – the unofficial US embassy in Taipei – amid escalating tensions across the Taiwan Strait.

Meanwhile Donald Trump has criticised China for its influence over North Korean leader Kim Jong-un, at one point threatening to cancel the summit between the pair in Singapore.

Shi Yinhong, a professor of international relations with Renmin University of China, said the broad China-US relationship were in “bad shape” given their disagreements over topics such as the South China Sea and North Korea.

He argued that Trump’s inconsistency and unpredictability should be blamed for the uncertainty in US-China relations.

China has made big concessions in opening up market access and agreeing to import significantly from the US, but Trump is still demanding more, he said.

“Even if there was some sort of agreement, it would be very short-lived and China would face more difficulties than before.”

Another area of friction has been US sanctions on the Chinese telecoms giant ZTE for breaching sanctions against Iran.

China is hosting the summit of the Shanghai Cooperation Organisation in Qingdao over the weekend as it tries to reinforce its influence over the regional bloc – which is intended to provide a counterweight to US power.

Those attending include the presidents of Russia and Iran, two countries that have been hit with sanctions by the US and its allies.