The Chinese minister of commerce says that the outbreak of a trade war between China and the US would be “disastrous” for both economies, while also claiming that American trade statistics are grossly inaccurate, and that an easing of controls on tech exports would serve to improve the prevailing trade imbalance.
Minister of commerce Zhong Shan (钟山) made the remarks on 11 March at a press conference for China’s 13th National People’s Congress.
“Sino-US economic and trade relations have recently met with some setbacks, and whether or not a trade war will break out between China and the US has already drawn the world’s attention.
“A trade war will have no winners, and only bring disaster to both China and the US, as well as the global economy.
“China does not want to engage in a trade war, and will also not actively launch a trade war.
“However, we are capable of responding to any challenges, and firmly defending the interests of the country and the people.”
Zhong highlighted the importance of strong economic ties to the health of Sino-US relations.
“President Xi Jinping has pointed out that economic and trade relations are the ballast stone and the propeller for Sino-US relations.
“The two nations established official relations nearly 40 years ago, and bilateral economic and trade relations have becoming increasingly close.
“Looking at trade, in under 40 years the scope of trade has grown 232-fold….is there any other pair of countries who have seen this much growth in under 40 years?
“Cumulative bilateral investment between the two countries has already exceeded USD$230 billion, and this fully indicates that the complementary economics of both countries is very strong, and the potential for cooperation is great.”
With regard to the trade imbalance between China and the US, Zhong Shan said that the issue may have been overstated by statistical methods.
“There are disparities in Sino-US trade statistics…US-China Joint Commission on Commerce and Trade Statistics Working Group conducts comparative research each year into Sino-US trade statistical disparities, and is comprised of government experts and other experts.
“According to the findings of the working group, official US statistics overestimate the trade deficit with China by 20% each year.”
Zhong further claimed that dialling back US controls on tech exports to China would in fact help to improve Sino-US trade imbalances.
“I believe that trade competitiveness is fundamentally industrial competitiveness, and Sino-US trade imbalances are related to US controls on hi-tech exports to China.
“A report from a US research institute indicates that if the US eased its restrictions on exports to China, the China trade deficit would fall by around 35%.”
Zhong Shan’s remarks come just after foreign minister Wang Yi warned that a Sino-US trade war would be harmful to all parties, and senior economics advisor Liu He said that neither country has any interest in waging a trade war.