US President Donald Trump on Friday stopped short of saying he would sign legislation supporting the Hong Kong pro-democracy movement that has cast a shadow over his efforts to cinch a trade deal with Beijing.
Six weeks after it was announced, the “phase one” bargain between Washington and Beijing appears no closer to becoming a reality, as both sides claim they are prepared to hold out for better terms.
In Beijing on Friday, Chinese President Xi Jinping (習近平) said China wants a deal, but is “not afraid” to “fight back” if necessary.
Photo: AP
Trump’s riposte came several hours later in a freewheeling live dial-in to Fox News, in which he told on-air hosts that the deal was “potentially very close,” but that Xi was under greater pressure to strike a bargain.
He also said that, when it comes to Hong Kong, he is balancing competing interests.
Beijing has denounced new US legislation adopted this week to support the restive semi-autonomous territory’s democracy movement.
“We have to stand with Hong Kong, but I’m also standing with President Xi,” Trump said. “We have to see them work it out.”
US regulators on Friday also turned up the pressure on Chinese telecoms ZTE and Huawei, branding them threats to national security and barring them from multibillion-dollar subsidy programs for wireless equipment and services.
The tussle over Huawei in particular has landed squarely in the middle of the trade conflict with China, raising the question of whether Trump could offer some concessions on access to the US market to grease wheels in the trade negotiations.
The world’s two biggest economies have been locked in a bruising trade conflict for more than a year, hitting each other with volleys of tariffs on hundreds of billions of US dollars of goods.
“As we always said, we don’t want to start the trade war, but we are not afraid,” Xi told former US officials and other foreign dignitaries at a meeting at Beijing’s Great Hall of the People.
“When necessary we will fight back, but we have been working actively to try not to have a trade war,” he told the group, which included former US secretary of state Henry Kissinger, former US secretary of the treasury Henry Paulson and Trump’s former economic adviser Gary Cohn.
China has insisted on a rollback of existing tariffs, to which Trump has said he did not agree. US officials want large purchases of US farm exports.
The Chinese president said the trade talks “may affect the future prospects of the world economy” and China holds a “positive attitude.”
Diana Choyleva, chief economist at Enodo Economics, said Xi’s comments do not mean that Beijing is about to go on the offensive, but it shows that it is “not going to budge.”
Trump has fostered distrust among the Chinese, making Xi “very determined that there is no point to really give up much,” Choyleva told reporters at the New Economy Forum.
Xi said he told IMF managing director Kristalina Georgieva, who met him earlier, that China would continue on the path of financial reform and opening, but “the precondition is that we will ensure security of our nation’s financial sovereignty.”
Xi warned that a “technological iron curtain” would “affect the future prospect of humanity.”
Paulson told Xi that 5G wireless technology could be “either a potential area of conflict or cooperation for China and US.”
“I believe key to minimizing conflict is if we can develop shared standards for emerging technologies,” he said.
Kissinger, who warned at the forum on Thursday that the trade dispute could snowball into armed conflict, told Xi that “our nations have to cooperate if there is to be a prosperous international order.”
Kissinger also met with Chinese Central Military Commission Vice Chairman Xu Qiliang (許其亮), official Xinhua news agency reported.
Sino-US military ties “should be a stabilizer for bilateral relations,” Xu said, adding that both sides should “strengthen strategic communication ... to avoid misunderstandings and misjudgment.”
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