Daily Management Review

China’s Xi Reiterates Urge On Interim Trade Deal With US But Will Fight Back If Needed


China’s Xi Reiterates Urge On Interim Trade Deal With US But Will Fight Back If Needed
While China is eager to arrive at the so called phase one of the trade agreement with the United States, Beijing will not be afraid to fight back is required, said Chinese President Xi Jinping. These comments assume importance because two days ago US President Donald Trump had alleged that China was not ready to make enough concessions which had made him somewhat reluctant to conclude the initial trade agreement.
It has been more than a year that the two largest economies of the world are engaged in a prolonged and acrimonious trade war which has seen both sides imposing tit for tat import tariffs on each other’s goods worth billions of dollars.
At a meeting in Beijing’s Great Hall of the People on Friday, Xi told former US officials and other foreign dignitaries: “As we always said we don’t want to start the trade war but we are not afraid.”
“When necessary we will fight back but we have been working actively to try not to have a trade war,” he told the group, which comprised of the former US Secretary of State Henry Kissinger, former US Treasury Secretary Henry Paulson and former Australian Prime Minister Kevin Rudd.
Last Saturday, there was a telephonic conversation between the top trade negotiators of both the countries over the phase one of a trade deal which was later described by the Chinese commerce ministry as being “constructive”.
However the phase one of the deal has been stuck as China is demanding extensive roll back of import tariffs while the US is not yet ready to make such roll backs. Additionally, analysts are also looking closely at the reaction of China to the US Congress passing a legislation lending support to the pro-democracy protesters in Hong Kong and some fear that the issue could cloud the trade negotiations.
“We want to work for a phase-one agreement on the basis of mutual respect and equality,” Xi told the foreign visitors, who were in town for the Bloomberg New Economy Forum.
If a trade agreement was not reached between the US and China, there can be an armed conflict between the two, warned Kissinger earlier in the week, after his speech  at a conference in Beijing on the future of the two economic giants.
“If the conflict is permitted to run unconstrained, the outcome could be even worse than it was in Europe,” Kissinger said. “World War I broke out because of a relatively minor crisis … and today the weapons are more powerful,” the 96-year-old added.
In recent years, bilateral relations between the US and China have been affected by a number of issues. For example, US naval operations in the disputed South China Sea had drawn strict criticisms from China while Beijing has been severely criticized by Washington over Chinese policy of mass detention of the ethnic Muslim Uighurs.
 “China is a major economic country. And so are we,” Kissinger said. “And so we are bound to step on each other’s toes all over the world.”