China’s Vice Premier Liu He told an economic conference in Hamburg on Tuesday that protectionist and unilateral approaches on trade would only deepen economic uncertainty, saying no country could emerge as a winner in a trade war.
“We believe that protectionist and unilateral approaches do not offer solutions to problems on trade. On the contrary, they will only bring about more economic uncertainty to the world,” Liu said.
“The history of economic development has proven time and again that raising tariffs will only lead to economic recession and no one ever emerged as a winner from a trade war. Our approach therefore is to seek a negotiated solution to the problems we have on the basis of equality and mutual respect,” he added.
The United States has levied additional duties of between 10 percent and 25 percent on $250 billion of Chinese goods this year as punishment for what it calls the country’s unfair trade practices, with the 10 percent tariffs set to rise to 25 percent next year.
Trump is due to hold trade talks with Chinese President Xi Jinping on the sidelines a G20 summit in Buenos Aires this week. In an interview with the Wall Street Journal, Trump said it was “highly unlikely” he would accept any request to hold off on the tariff increase, due to take effect on Jan. 1.
While China’s exports have been resilient so far, many economists expect the impact of the trade war with the United States to be felt next year, adding to China’s domestic economic concerns.
The Chinese government has set a target to expand the world’s second-biggest economy by around 6.5 percent this year. but growth has been slowing amid Beijing’s multi-year campaign to curb a corporate debt build-up and clamp-down on risky lending practices.
In response to the gathering economic headwinds, Beijing has cut the level of cash that commercial banks must hold as reserves four times so far this year, in a bid to spur lending.
The government is also expanding fiscal spending, cutting taxes and pledging infrastructure investment.
China’s economy is “on track” to meet the growth target for the full year, Liu said.