MNI EXCLUSIVE: China Will Stand Its Ground In U.S. Trade War

By Iris Ouyang

     BEIJING (MNI) - A recent softening in China's rhetoric regarding its

ongoing trade dispute with the U.S. does not signify a meaningful de-escalation

in tensions between the world's two largest economies, a Ministry of Commerce

researcher told MNI on Friday.

     Rather, China remains ready for a trade war and is prepared to take

concrete actions to defend its interests. 

     "Instead of throwing threats and yelling denouncements, we prefer to take

real measures," said Mei Xinyu, a researcher and advisor for the Ministry of

Commerce. 

     Mei is frequently quoted in Chinese state media regarding the ongoing

U.S.-China trade spat, with his comments therefore seen as a good gauge of

official thinking.

     Statements from China's Ministry of Commerce regarding ongoing trade

tensions with the U.S. have notably softened in tone this week, with officials

cautioning on the potential negative impacts of Washington's actions on the U.S.

economy and saying that they will closely examine the likely ramifications for

Chinese companies. In Mei's view, however, this may simply be 'the calm before

the storm.'

     Indeed, while the White House decided earlier this week to back down from

plans for strict new restrictions on Chinese investment in the US -- opting

instead for a less confrontational approach which would entail closer

cooperation with Congress -- tensions look set to flare again imminently. The

Trump administration is scheduled to impose a first round of trade tariffs on

$34bn worth of Chinese products on July 6 and Mei has stressed to MNI that China

is prepared to take immediate retaliatory action.

     "But after that it would be China picking its fights," Mei commented,

intimating that China may in future choose to impose trade restrictions on the

U.S. in a proactive, rather than reactive, fashion.

     --US 'TRAP'

     Wang Haifeng, a director at the National Development and Reform Commission

(NDRC) -- China's economic planning body -- also affirmed China's resolute

stance.

     "If there is to be a trade war, China will give the U.S. some company,"

said Wang in an interview with MNI. "But China will not fall into the trap set

by the US to restrict American companies' investment in China, which would

benefit the U.S. to guide American companies back to the States."

     Other trade advisors and researchers in China have told MNI that rather

than limit US business investment in the country, China will further open up its

economy, as it recognises the importance of foreign investment for economic

development. 

     Indeed, Mei emphasised during his interview with MNI that China wants to

establish itself as a global investment hub, in stark contrast with the Trump

administration's 'America First' protectionist approach.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI London Bureau; +44 207-862-7489; email: ukeditorial@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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