China-US relations

Beijing shrugs off tough talk from Trump’s top trade negotiator

Foreign ministry suggests WTO can handle disputes after Robert Lighthizer criticises China’s economic model and trade practices

PUBLISHED : Tuesday, 19 September, 2017, 6:49pm
UPDATED : Tuesday, 19 September, 2017, 6:52pm

Harsh criticism of China’s economic model and trade practices by US President Donald Trump’s top trade negotiator is just bluster and there is no real threat of a trade war, Chinese researchers say.

US Trade Representative Robert Lighthizer – who served under then president Ronald Reagan in the 1980s, when he forced Japan to make trade compromises – said in a speech in Washington on Monday that China’s economic model represented an “unprecedented” threat to the world trading system that could not be addressed under current global rules.

“The sheer scale of their coordinated effort to develop their economy, to subsidise, to create national champions, to force technology transfers and to distort markets in China and throughout the world is a threat to the world trading system that is unprecedented,” Lighthizer said.

US probe into Chinese trade practices will only harm American businesses

Lighthizer’s office is conducting an investigation into China’s trade practices and its alleged theft of US businesses’ intellectual property under Section 301 of a rarely used 1974 trade law.

“The Trump administration is trying to use this as a bargaining chip,” Lu Xiang, a researcher on US studies at government think tank the Chinese Academy of Social Sciences, said of Lighthizer’s latest comments.

He added that making accusations against China would not help the US to narrow its trade deficit. “The US should do some work on the supply side to find a way out of this,” Lu said.

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Beijing did not directly hit back at Lighthizer over his criticism. Chinese foreign ministry spokesman Lu Kang told a regular briefing on Tuesday that China would go to the World Trade Organisation to resolve any trade disputes.

“Both China and the US are members of the WTO,” Lu said. “As to whether trade practices are appropriate, there are clear WTO rules.”

China joined the WTO in 2001 partly by promising to gradually open its market to foreign competition. But overseas investors have been dissatisfied with China’s progress and many of its domestic markets – from telecoms to banking – are still dominated by state players.

The European Union Chamber of Commerce in China said in its annual report released on Tuesday that “it appears that in many areas China is no longer opening up, but selectively closing up”.

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EU chamber president Mats Harborn said of Lighthizer’s comments: “Neither the US nor other countries are willing to enter into trade wars or trade conflicts with China – but they want to get into constructive dialogues with China on how to move up the value chain and move towards sustainable business together.”

He Weiwen, an executive council member at the China Society for WTO Studies and a former business adviser to the Chinese consulate in New York, said Lighthizer’s reading of the situation was “exaggerated”. “This is not new,” He said. “During the Obama administration, there was criticism that China was pursuing state capitalism.”