China strikes defiant tone on trade in new white paper, blaming U.S. for 'unacceptable' demands

AP, AFP-JIJI, Reuters, Bloomberg

China issued a report Sunday blaming the United States for a trade dispute and said it won’t back down on “major issues of principle.”

The statement from the Cabinet spokesman’s office said that China has kept its word throughout 11 rounds of talks and will honor its commitments if a trade agreement is reached.

“A country’s sovereignty and dignity must be respected, and any agreement reached by the two sides must be based on equality and mutual benefit,” it said.

The U.S. has accused China of stealing trade secrets and forcing technology transfers. The Trump administration has imposed 25 percent tariffs on $250 billion worth of Chinese imports and is planning to tax another $300 billion in imports that have so far been spared. It also escalated the stakes last month by putting the Chinese telecom giant Huawei Technologies Co. on a blacklist that effectively bars U.S. companies from supplying it with computer chips, software and other components without government approval.

Beijing responded by imposing tariffs on $60 billion worth of U.S. products, which went into effect Saturday. It also retaliated against the U.S. blacklisting of Huawei by announcing Friday that it will establish its own list of “unreliable entities” consisting of foreign businesses, corporations and individuals.

Being published in eight languages, Sunday’s report lays out China’s argument for blaming Washington for the frictions as well as the costs to both sides.

“Whatever the future might bring, China is confident of meeting challenges head on, turning risks into opportunities and opening new chapters,” it said. “China remains committed to its own cause no matter how the external environment changes.”

“We still have sufficient room for fiscal and monetary policy maneuver” to maintain health of the Chinese economy amid frictions, it said. The escalating trade war has not “made America great again” and has instead damaged the American economy, the white paper said.

“The (U.S.) tariff measures have not boosted American economic growth. Instead, they have done serious harm to the U.S. economy,” the paper said, pointing to what it described as increased production costs and consumer prices in the United States and threats to economic growth. Vice Commerce Minister Wang Shouwen said the United States overestimates the trade deficit between the two countries and China should not be blamed for job losses in the U.S. manufacturing sector.

Wang told a news conference the U.S. goods and services deficit with China is close to $150 billion — not the $410 billion quoted by U.S. officials. China’s processing trade with the United States should not be included in trade deficit calculations, he added.

He also said China does not instruct domestic companies to acquire certain projects and technology.

Wang said the commerce ministry is investigating reports of delays in customs checks, adding that the country will make efforts to cut the length of customs checks and reduce costs for importers.

Wang said that it is “unacceptable” if some countries use rare earths from China to create products that limit China’s development, and he said China is willing to meet other countries’ requirements for rare earth consumption.

At the Shangri-La Dialogue, a major regional security conference in Singapore, Defense Minister Wei Fenghe said China is not seeking to surpass the U.S. as the globe’s dominant power but is prepared to “fight to the end” if needed.

“China has no intention, no power, to be the boss of this world, and against the United States to fight for this status,” Wei said Sunday. “Confrontation, including between China and the United States, is inconsistent with the interests of the two countries’ peoples and is not in the interest of the people of the world.”

Wei added that China still wants to resolve escalating tensions through dialogue, but it won’t be bullied. “If the U.S. wants to talk, we will keep the door open,” Wei said. “If they want to fight, we will fight to the end.”

A day earlier, Acting U.S. Defense Secretary Patrick Shanahan told the gathering that the U.S. and China will eventually resolve their differences, downplaying the significance of escalating trade tensions even as he ripped Beijing’s leaders for behavior that “sows distrust” in Asia.

Wang, who is also deputy international trade representative, said China had been forced to “take forceful measures in response” to U.S. actions and denied China had backtracked on its earlier commitments.

“It is irresponsible of the U.S. to accuse and smear China,” Wang said.

In negotiations “nothing is agreed until everything is agreed,” Wang said. He said the U.S. had made unacceptable demands, including on tariffs and compulsory requirements that infringed on Chinese sovereignty.

He said of the U.S. tactics, “You give them an inch, they take a yard.”