China concessions to US would be ‘grave error’ in any trade deal

Chinese state media and government advisers have said Beijing is in no rush for a trade deal, instead warning that any concessions made to the United States would be a grave error.

A commentary in the Communist Party mouthpiece People’s Daily on Monday said Beijing needed to stand up to the US and not give in to pressure.

“If China appears weak and gives concessions under hegemony, it will have committed a subversive historical error,” said the commentary, attributed to Renmin University international relations professor Jin Canrong and Sun Xihui, a researcher at the Chinese Academy of Social Sciences.

“Facing extreme pressure and bullying behaviour, being weak and taking a step back will not get sympathy. We can only protect the core interest of the nation and the people by upholding rational and favourable struggle at the right pace.”

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The commentary urged China to abandon a mindset which glorified and feared the US – described as leading to thinking it would be defeated because of the huge gap in strength between the two countries – and instead be determined to continue the struggle until victory was achieved.

A new round of punitive tariffs imposed by the US and China took effect on Sunday in the latest escalation of their 14-month trade war.

Clothing, food, household goods, Bluetooth ear buds and televisions are among the everyday items which have been hit with a new 15 per cent US tariff on US$110 billion worth of Chinese products. A second round of tariffs is due to take effect on December 15, encompassing virtually all Chinese goods which have yet to be affected.

In response, Beijing is sticking to the US schedule by raising duties on US$75 billion worth of US goods on Sunday, with plans for further tariffs on December 15.

Talks to resolve the tariff war remain stalled after collapsing in May when the US accused China of backtracking on its concessions. A meeting between Chinese President Xi Jinping and US President Donald Trump in late June led to an agreement to resume talks, but the momentum was short-lived.

Shi Yinhong, a professor of international relations at Renmin University in Beijing, said China would stick to its three main principles for the talks – that the US remove tariffs, the negotiation text should be fair, and that China’s purchase of US products should be determined by domestic conditions.

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Shi said the US had demanded a portion of the tariffs remain in place until after its presidential election to keep China committed to delivering the concessions, which was unacceptable to Beijing.

“If the three principles are not met, there is really nothing to talk about,” Shi said. “Since the escalation in May, China can only retaliate. Otherwise, it will be seen as weak.”

Shi said China could use non-trade measures, such as its leverage on North Korea and Iran, to put pressure on the US.

“China has expressed sincerity, but Trump has only taken this as a sign that China is eager to reach a deal,” he said. “There are doubts over whether the US economy will continue its momentum ahead of the 2020 election. Trump may compromise if there is clear sign of economic recession in the US.”

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A Chinese source close to the government said China still had other tools to use.

“But the question is whether we want tensions to escalate,” the source said, pointing to sluggish economic data in July and August. “I don’t think we can play a protracted war.”

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