BEIJING — China’s premier told the United States on Wednesday: We don’t want a trade war with you, but if one breaks out, your companies would bear the brunt.
Yet despite tensions over jobs, currency rates and “security matters,” Premier Li Keqiang told a news conference in Beijing ahead of the first visit by the new U.S. secretary of state that he remained optimistic about the future of China’s relationship with the United States.
“Our hope on the Chinese side is that, no matter what bumps this relationship may run into, it will continue to move forward in a positive direction,” he said.
The two countries share extensive common interests and should “sit down to talk to each other” to build trust and narrow differences, Li told journalists at the end of China’s annual parliamentary session. He added that diplomats were working toward a face-to-face meeting between President Xi Jinping and President Trump.
Experts say China has been pushing hard to arrange such a meeting, realizing how important personal chemistry between the two leaders could be in maintaining stable ties. U.S. news media have reported that a meeting has been tentatively scheduled for April 6-7 at Trump’s Mar-a-Lago resort in Florida.
Secretary of State Rex Tillerson arrived in Tokyo late Wednesday for his first Asia trip since taking office, and he will visit Beijing later in the week.
Li said China’s trade and investment ties with the United States created up to 1 million American jobs last year.
“Recently I came across an article from an authoritative international think tank. It says that should a trade war break out between China and the United States, it would be foreign-invested companies, in particular U.S. firms, that would bear the brunt of it,” he said.
“We don't want to see any trade war breaking out between the two countries. That wouldn’t make our trade fairer,” he added.
While a trade war would have a disproportionate effect on American firms such as Apple that outsource manufacturing to China, economist Christopher Balding said it is not accurate to say that the U.S. economy as a whole is more vulnerable.
“China is much more dependent on trade with the U.S. as a percentage of GDP, and received most of its trade surplus from the U.S.,” said Balding, an associate professor at the HSBC Business School in Shenzhen. It would be easier for U.S. firms to move their supply chain than for China to change its industrial structure, he added.
“It remains advisable for China to match its rhetoric on open markets and free trade with action, by opening up its markets to competition in goods and investment,” Balding said.
Li’s comments came a day after Trump’s nominee for U.S. trade representative said that China is one of the top trade problems the United States faces and that it is not clear whether Beijing is still manipulating its currency.
“If you look at our problems, China is right up there,” Robert E. Lighthizer told the Senate Finance Committee at a confirmation hearing Tuesday.
Trump repeatedly complained about China on the campaign trail, accusing it of stealing American jobs, manipulating its currency, militarizing the South China Sea and not doing enough to rein in North Korea’s nuclear program.
He then upset Beijing by accepting a phone call from Taiwanese President Tsai Ing-wen after his election and publicly questioning whether Washington should maintain its one-China policy.
But he eventually backed off, agreeing to honor the policy during what he called a “very warm” phone call with Xi in February. Since then, he has also refrained from any criticism of China on his Twitter feed.
Li reiterated that the one-China policy is the “political foundation” of relations and must not be undermined.
“With that foundation in place, we believe there are bright prospects for China-U.S. cooperation,” he said.
While relations with China will be discussed during Tillerson’s visit, North Korea’s nuclear program is expected to top the secretary of state’s agenda.
Li repeated his country’s call for dialogue to lower tensions on the Korean Peninsula.
“Tensions may lead to conflict which would only bring harm to all the parties involved,” he said. “It’s just common sense that no one wants to see chaos on his doorstep.”