China ‘fully prepared’ amid fears of trade war with US
Print Edition
CHINA said yesterday that it’s “fully prepared” for a trade war with the United States.
US President Donald Trump’s administration is set to impose additional tariffs on US$34 billion worth of goods from China from Friday, and has threatened successive waves of duties on up to US$450 billion in Chinese imports.
China has vowed to retaliate with its own tariffs on US agricultural products and to take more “qualitative” measures if Trump escalates the conflict.
Chinese Foreign Ministry spokesman Lu Kang said China is “fully prepared to take a package of necessary measures” to safeguard its national interests.
US companies ranging from soybean farms to whiskey distilleries and automakers like Ford and Tesla could suffer if China ramps up retaliatory measures.
China accuses Washington of protectionism, with China Mobile the latest to encounter obstacles in the US market. A US agency under the Department of Commerce recommended on Monday against giving operating licenses to China’s largest telecom carrier, citing national security risks.
Lu called the warnings “unfounded speculation and an irrational clampdown” stemming from a Cold War mentality.
“We hope the US will provide a level-playing field for Chinese companies’ investment and operation in the US and do something conducive to the mutual trust,” the spokesman said.
Also yesterday, China’s central bank Governor Yi Gang said the yuan’s 3 percent depreciation over the past two weeks reflects a strengthening of the US dollar and “the effect of external uncertainties.”
Despite that, Yi said financial risks were under control.
“The fundamentals of the Chinese economy at present are good,” he said. “The Chinese economy has entered a phase of high-quality development, with a stable international balance of payment and generally balanced cross-border capital flow.”
“Our country implements a floating exchange system consulting a basket of currencies and based on market supply and demand,” Yi said. “Years of practice have shown this system to be effective and must continue to be adhered to.”
Yi said China will continue to adopt a prudent and neutral monetary policy and deepen the market-oriented reform of the yuan’s exchange rate mechanism.
Responding to questions over a safety warning to Chinese citizens traveling to the US issued by China’s embassy in Washington late last week, foreign ministry’s Lu said the government was merely fulfilling its duty to warn travelers of “potential dangers.”
The warning to Chinese travelers noted the high cost of medical treatment in the US, the importance of guarding against crime and terrorist attacks, and the considerable powers wielded by Immigration and Customs Enforcement agents.
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