China Urges U.S. to Fix ‘Wrong Practices’ to Resume Trade Talks

May 23, 2019 07:43 AM
China blamed Washington for wrecking trade talks and insisted the U.S. must alter its “wrong practices” before negotiations can resume.

(Bloomberg) -- China blamed Washington for wrecking trade talks and insisted the U.S. must alter its “wrong practices” before negotiations can resume, leaving the next move to President Donald Trump as financial markets slump amid prospects for a prolonged dispute.

“China’s stance on the talks has been clear -- if the U.S. wants to resume talks, they should show sincerity and correct their wrong practices,” ministry spokesman Gao Feng said in Beijing on Thursday. “Only on a basis of equality and mutual respect can the talks continue.”

The comments are the latest sign that China has no intention of making concessions to the U.S. to restart talks, which collapsed earlier this month. The U.S. blames China for backing out on parts of the deal which were already agreed, while China blames the U.S. for escalating the trade war by announcing further tariffs.

U.S. equity futures and European stocks tracked a slide in Asian shares as investors increasingly anticipate a full-blown trade war between the world’s two largest economies. Safe assets were in demand, with gold and the yen gaining alongside the dollar and Treasuries.

Gao didn’t respond to a question about whether the two sides were still in communication, or if there were plans for the U.S. delegation to come to Beijing. He also declined to say what specific signs of sincerity China required from the U.S. to restart talks.

“The U.S. unilaterally escalated trade tensions, and has taken many actions which seriously hurts the China-U.S. trade talks,” he said. “There are principles for cooperation, and there are bottom lines in negotiations. China won’t make concessions on matters of principle.”

‘Extreme Pressures’

The U.S. ratcheted up tensions with China last week by putting Huawei Technologies Co. on a blacklist that jeopardizes its supply of American components from semiconductors to the Google software that run on its smartphones. Trump is considering widening the dragnet to include five Chinese video surveillance companies, people familiar with the matter said earlier.

China has lodged a solemn protest with the U.S. on the ban on exporting Huawei, Gao said.

Chinese Foreign Minister Wang Yi, speaking at the Shanghai Cooperation Organization meeting in Bishkek, Kyrgyzstan on Wednesday, said China’s door is open if the U.S. is willing to negotiate in an equal manner, but will definitely fight until the end if the U.S. opts for “extreme pressures.”

Wang said the U.S.’s suppression of a private company such as Huawei is “typical behavior of economic hegemony.”

Economists at some of the biggest financial institutions are growing increasingly pessimistic that the two sides will resolve the trade dispute. Goldman Sachs Group Inc., Nomura Holdings Inc. and JPMorgan Chase and Co. are among those that have rewritten their forecasts as Trump threatens to impose a 25% tariffs on around $300 billion of additional Chinese imports.

Analysts at Nomura have made that hike in duties -- which would mean practically all of China’s exports to the U.S. are hit by tariff hikes -- their baseline forecast. They see it as a 65% probability before year-end, and most likely to come in the third quarter.

New Cold War

China and the U.S. may be stuck in a cycle of “fighting and talking” until 2035, according to a senior Chinese government researcher, who said relations will get worse before they get better.

For the next few years both sides will test each other’s strategic intentions and be prone to misjudgments which make trade talks difficult, according to Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges. Zhang previously worked at the country’s top economic planner, and spoke at a briefing organized by the government.

Speaking in the southeast province of Jiangxi this week, President Xi Jinping readied Chinese officials for a lengthy fight. He warned cadres of the “complicated and long-term effects” of external influences and called for a “new Long March” -- recalling the party’s revolutionary struggles in the 1930s.

Xi said China should become self-reliant in core technologies and even issued a veiled threat when he visited a rare earths processing plant, signaling that China may restrict sales of the elements used in everything from smartphones to electric vehicles.

China’s government is drawing up plans to potentially bail out Huawei if necessary, according to a person familiar with discussions on how to respond to the threats to the company. One possible option includes offering financial assistance to Huawei, according to the person, who added that nothing had been decided yet.

The Communist Party’s flagship People’s Daily newspaper on Thursday accused U.S. politicians of waging a “technology cold war” and warned that targets in other countries could also suffer from the U.S.’s “zero-sum mentality.”

©2019 Bloomberg L.P.

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Spell Check

rural, NC
5/25/2019 06:09 PM

  We would not be having this conversation now if not for another idiot democract , named harry truman , not letting MacArthur finish the job on the north koreans , chinese , and probably the russians.

Steven Collins
Omaha, NE
5/24/2019 11:22 AM

  Curious of thenlanguage used by the Chinese. The US must correct its "wrong practices"? These retards apparently havenlittle to no idea of how much pain they are in store for. With record flooding, bean and corn prices are set to soar this fall due to low supply caused by a wide swath of floods. Demand for corn is already up with fed bio fuel initiatives in place. Pork production and consumption will be absorbed. Chinese trade will tip and tip hard within the next quarter, short term growth will more than half, long term growth with slide, and the China firat policy and belt and road initiatives will begin to deteriorate. All because they simply won't stop stealing information, engaging in currency manipulation, and too many other nefarious practices to mention that violate their agreement made when they entered the WTO. Maybe its time for China to feel some pain.

PJ Jahn
Ptown, IL
5/29/2019 09:49 AM

  James, as you show your foolishness only proves you did not learn anything from our wars, conflicts, skirmishes, or what ever you chose to call them over in that part of the world. MacArthur was the idiot, not Truman. He couldn't follow orders, nor did he know who was the boss. His value of U.S. troops lives, was never anything to be proud of in the least! The Pacific part of WW II, was a very difficult, and at a very high cost of U.S. servicemen lives. I had 2 uncles, and a father in law over there. It was very ugly! Truman had a country that was very sick, and tired of war. It does appear that you are afflicted with Poisonous Partisan Politics, and just can't deal with the true facts. Your thoughts in your statement prove it.


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