The world’s two largest economies are at loggerheads as trade talks have apparently stalled, with US President Donald Trump hiking tariffs on Chinese goods earlier this month and blacklisting telecommunications giant Huawei.
“This premeditated instigation of a trade conflict is naked economic terrorism, economic chauvinism, and economic bullying,” Zhang told reporters in Beijing, stressing that China opposed the systematic use of “big sticks” such as sanctions, tariffs and protectionism.
“There is no winner in a trade war,” he warned. “This trade conflict will also have a serious negative impact on the development and revival of the global economy.”
China has hit back with its own tariff increase that will take effect on June 1, while state media has suggested that Beijing could stop exports of rare earths to the US, depriving Washington of a key resource used to make hi-tech products.
“We advise the US to not underestimate China’s ability to safeguard its own development rights and interests, and not to say we didn’t warn you,” Chinese Communist Party’s mouthpiece, the People’s Daily, said in an editorial on Wednesday, warning that rare earths could be used as a countermeasure.
China produces more than 95 percent of the world’s rare earths and the US relies on the Asian superpower for more than 80 percent of its imports.
US Secretary of State Mike Pompeo, asked about the rare earths threat during an interview, said the US has already “lost and suffered for decades under the current rules” and that Trump’s “singular focus is to push back” on China.
He renewed his attack on Huawei, saying there was a “deep connectivity” between the company and the Chinese state that had no parallel in the US system.
“If it’s the case that the Chinese Communist Party wanted to get information from technology that was in the possession of Huawei, it is almost certainly the case that Huawei would provide that to them,” he told the Fox Business Network.
Huawei has rejected the criticism and on Tuesday filed a motion for summary judgement, hoping it would swiftly win a lawsuit against the US legislation that bars federal agencies from using the company’s equipment.
China has consistently rebuffed US complaints about lack of access to its economy for foreign companies, forced technology transfers and intellectual property protection, and repeatedly promised further economic reforms.
While Washington and Beijing spar, Xi is preparing to meet President Vladimir Putin from June 5 to June 7 as the neighbouring giants forge closer ties.
Xi is also scheduled to speak at a major investor forum in St Petersburg.
Beijing and Moscow have broad consensus and common interests on the trade war issue, Zhang said.
“China and Russia will certainly strengthen economic and trade cooperation, including cooperation in various fields such as economic and trade investment,” he added.
“We will certainly respond to various external challenges, do what we have to do, develop our economies, and constantly improve the living standards of our two peoples.”