China has become increasingly impatient over US officials’ misleading statements about trade imbalances between the two countries and is watching closely for any measure from the US that could hurt Chinese interests, according to two advisors to the Chinese government.
China should no longer engage in a war of words with the US over misleading trade numbers claimed by US officials and should instead prepare a robust response to US protectionist moves, said the two advisors, who are affiliated with China’s Ministry of Commerce (MOFCOM).
During a regular press briefing in Beijing on Tuesday, Geng Shuang, a spokesperson for China’s Ministry of Foreign Affairs, warned that China would match the US list of potential trade measures against China.
“The US side has a list, so does the Chinese side,” Geng said, as he reiterated China’s long-held stance that China would not start a trade war, but would not be afraid of one either.
The comments came as trade tensions between China and the US escalated in recent weeks after the US imposed hefty tariffs on steel and aluminum imports and announced potential protectionist measures against Chinese products, drawing a harsh response from China.
China on Tuesday imposed tariffs on $3 billion worth of US goods. The back-and-forth has sparked widespread fears of a potential trade war.
Misleading trade data
But as negotiations are underway between Chinese and US officials, China is increasingly impatient over claims by US officials of exaggerated trade numbers and unreasonable demands.
A recent report from Deutsche Bank showed that US trade data overlooked US companies’ interests in China and that US officials had grossly exaggerated its trade deficit with China.
Citing official US data, the report pointed out that US firms sold $372 billion worth of goods in China in 2015, including $223 billion by subsidiaries in China, which is not accounted for in the US export totals, while Chinese firms sold $402 billion of goods and services to the US in total.
That comes down to a $30 billion deficit for the US, according to the report, which was released on Thursday. That is an extremely low number compared with the $365.7 billion deficit claimed by US officials.
The report noted that US companies such as General Motors and Apple Inc have become more dependent on the Chinese market. In 2017, General Motors sold 4 million cars in China, mostly through its Chinese branch, a lot more than the 3.6 million in the US, while Apple’s user base in China reached 310 million, twice as many as in the US.
“The most damaging retaliation from China would be to punish US business interests in China,” said the Deutsche Bank report.
More than trade deficit
Li Yong, a senior research fellow at the China Association of International Trade under MOFCOM, one of the two aforementioned advisors, said that Chinese and US officials have long discussed the discrepancies in their trade data calculations, but US officials showed no concern over adopting outdated methods, and had used misleading numbers to pressure China.
“There is no need for never-ending talk about the numbers. We will look at their actions and respond strongly,” Li told the Global Times on Tuesday. “It’s quite clear that the US’ intention was not just to address the trade imbalance, but also to constrain China, because China’s rise poses competition for the US.”
Mei Xinyu, a research fellow at the Chinese Academy of International Trade and Economic Cooperation under MOFCOM, the other advisor as mentioned above, also said that the US government is not looking after its companies’ interests; instead it was putting their nationalistic goals first.
While reiterating that China is open to negotiations at the press briefing on Tuesday, Geng, the Foreign Ministry spokesperson, also urged the US to be respectful and avoid coercive tactics.
“Negotiations must be conducted with mutual respect and equal treatment. It’s not about one side being unilaterally coerced by the other… It’s not about asking for sky-high prices and importunate demands,” he said.
Source: Global Times