Chinese premier warns US against ‘trade war’

Chinese Premier Li Keqiang on Wednesday warned the US against starting a trade war, while expressing optimism that the world’s two largest economies could keep relations steady despite Trump-era frictions.
“We do not want to see any trade war breaking out between the two countries. That would not make our trade fairer,” Li told reporters at a press conference closing China’s annual parliamentary session.
“No matter what bumps the China-US relationship may run into, we hope this relationship will continue to move forward in a positive direction.”
China and the US are currently discussing arrangements for a summit between President Donald Trump and his counterpart Xi Jinping that could help ease tensions stoked by Trump’s fiery election-campaign rhetoric.
Trump threatened to upend decades of multilateralism and raised fears of a trade war with China while on the campaign trail.
After his election victory, he angered Beijing with a protocol-busting telephone conversation with the president of self-ruled Taiwan, which China claims as its own.
Trump and Xi subsequently smoothed over the dispute last month in a phone call in which the US leader reiterated Washington’s adherence to the “One China” policy that nominally endorses Beijing’s claim to Taiwan.
In the wake of the Xi-Trump conversation, Li said he saw “bright prospects” for bilateral relations.
“I believe whatever differences we have, we can still sit down and talk to each other and work together to find solutions,” he said.
Li’s Parliament-ending press conference is the only time each year that foreign journalists are allowed to put questions to a member of China’s elite leadership inner circle, though they are pre-approved.
Li cited a report, which he said indicated that if a trade war occurred, “foreign-invested companies, in particular US firms, would bear the brunt of it.”
Li vowed that China would continue to act as a steady pillar of the global economy despite trimming its domestic economic growth forecast for this year.
Delivering his government’s annual report to the National People’s Congress (NPC) 10 days earlier, Li cited a “more complicated and graver situation” facing the global and domestic economy this year. He said the government growth target for 2017 was “around 6.5 percent, or higher if possible,” a further deceleration after full-year growth last year came in at 6.7 percent, the weakest since 1990.
He said Wednesday that achieving the 2016 target “will not be easy,” and warned that China faced a plethora of financial risks at home.
Li said: “China has no intention to devalue its currency to boost exports.”
The premier said Beijing would push ahead with market-oriented reforms of its mechanism for setting the yuan’s exchange rate.
He said the exchange rate “will remain generally stable.”
The premier said China still has the world’s biggest foreign exchange reserves and has more than enough for normal business activity.
China is trying to pivot from hyper-fast growth based on investment, polluting industries and exports toward a steadier consumer-driven model. But the transition is complicated by the slowing growth, a slumping currency, bloated industrial firms, capital flight abroad and fears of a looming housing bubble and bad-loan crisis.
Li said China would “continue to be a strong driving force in the face of a sluggish global economic recovery.”
But he added that Chinese policymakers need to “take very seriously the risks we are facing on the domestic front, especially in the financial sector.”
“We need to fasten our seat belts and prevent any acute outburst of financial risks and we will also make sure that we prevent any regional and systemic risks,” he said.

Source: Arab News