Exclusive: China envoy warns of dire consequences if U.S. hardliners hold sway


David Brunnstrom, David Lawder, Matt Spetalnick November 28, 2018

WASHINGTON (Reuters) – China is going to this week’s G-20 summit hoping for a deal to ease a damaging trade war with the United States, Beijing’s ambassador to Washington said on Tuesday, while warning of dire consequences if U.S. hardliners try to separate the world’s two largest economies.

Speaking to Reuters before heading to join Chinese President Xi Jinping’s delegation at the Group of 20 summit in Buenos Aires, Cui Tiankai said China and the United States had a shared responsibility to cooperate in the interests of the global economy.

Asked whether he thought hardliners in the White House were seeking to separate the closely linked U.S. and Chinese economies, Cui said he did not think it was possible or helpful to do so, adding: “I don’t know if people really realize the possible consequences – the impact, the negative impact – if there is such a decoupling.”

He drew parallels to the tariff wars of the 1930s among industrial countries, which contributed to a collapse of global trade and heightened tensions in the years before World War Two.

“The lessons of history are still there. In the last century, we had two world wars, and in between them, the Great Depression. I don’t think anybody should really try to have a repetition of history. These things should never happen again, so people have to act in a responsible way.”

Asked whether he thought the current tensions, which have seen the two sides impose tit-for-tat tariffs on hundreds of billions of dollars of goods, could degenerate into all-out conflict, Cui called the outcome “unimaginable” and the two countries should do everything to prevent it.

Cui said China did not want to have a trade war and sought a negotiated solution to the impasse stemming from U.S. President Donald Trump’s demands for far-reaching Chinese concessions to correct a $375 billion goods trade deficit with China.

“We are against any trade war,” the ambassador said, but added that China would “fight to safeguard our own interests.”

“We believe that the key to a negotiated solution to the trade issues is a balanced approach to the concerns of both sides and honestly so far I have not seen sufficient response from the U.S. side to our concerns.”

“We cannot accept that one side would put forward a number of demands and the other side just has to satisfy all these things.”

White House chief economist Larry Kudlow said on Tuesday that Trump was open to a trade deal with China but was prepared to hike tariffs on Chinese imports if there is no breakthrough on long-standing trade irritants during a planned dinner on Saturday in Buenos Aires with Xi.

TREASURY DEBT

Cui said he did not believe Beijing was seriously considering using its massive U.S. Treasury debt holdings as a trade war weapon, citing concerns that such a move would destabilize financial markets.

“This is very dangerous, this is like playing with fire,” he said when asked if China would consider selling Treasuries or reducing purchases should trade tensions worsen.

Trade and economic analysts have often said China could slow its purchases of U.S. Treasuries or sell off its holdings to pressure Washington into a deal.

China is the largest foreign holder of U.S. Treasury debt, with $1.15 trillion on Sept. 30, according to the latest Treasury data, compared with $1.19 trillion a year earlier. As of Monday, there was about $15.97 trillion of total public Treasury debt outstanding.

Cui said China’s Treasury holdings were a good example of the economic interdependence between the United States and China.

He said Trump and Xi had “a very good working relationship and personal friendship” formed in three previous face-to-face meetings, including two formal summits, and that had been shown by a long phone conversation in early November.

White House insiders say there remain substantial differences within the Trump administration over how far to push China.

The division groups on one side anti-China hardliner and trade adviser Peter Navarro, U.S. Trade Representative Robert Lighthizer and those who favor a complete re-evaluation of the relationship. On the other side are pragmatists led by Kudlow and Treasury Secretary Steven Mnuchin, concerned about the harm deepening friction could do to the U.S. economy and markets.

Reporting by David Brunnstrom, Matt Spetalnick and David Lawder; Editing by Chris Sanders, Alistair Bell and Peter Cooney

Source: Reuters “Exclusive: China envoy warns of dire consequences if U.S. hardliners hold sway”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


13 Comments on “Exclusive: China envoy warns of dire consequences if U.S. hardliners hold sway”

  1. URL says:

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  2. johnleecan says:

    American will sink into a great depression alright when she stops trading or even just 50% of her imports with China. America has no answer for the replacement of Chinese made goods. America’s poverty level and crimes will shoot up dramatically and chaos will ensure. The government will have a hard time controlling the people because people have guns and to each his own. America will go back to the Wild West days.

    This in turn will force America to use her bullying and false flags to accuse China of interfering and destabilizing America. America, with its back against the wall, will use nuclear weapons to ensure that if we going down, you’re going down too mentality.

    Cui TianKai is most probably right.

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  3. Martian2 says:

    Cui’s response sounded as if China is scared to dump those T-bills, people might think China is the one shaking in her boots

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  4. Simon says:

    Trump’s ties are made in China

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  5. Copperhead says:

    Please excuse me if I yawn at China’s feeble threats toward the United States. America is shaking in her boots.

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    • Simon says:

      I yawn at America feeble threat to increase taxes on its own people for Chinese goods. Placing sanction is the only effective way so America cant even do that anymore.

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    • Steve says:

      American boots are made in china. U damn right America is shaking in her boots.

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    • kommonsense says:

      feeble threats? america would have invaded decades ago but after their humiliating defeats in korea ( the only time the once proud u.s. marines were forced to retreat) and vietnam,(the american soldiers were forbidden to follow the gooks into china after being ambushed–for fear of china unleashing the full might of the PLA onto the cowardly americunts–it would’ve been like an elephant stepping on an ant ).
      read an article a few days ago about how not only are the two sides aren’t making much progress in the trade dispute, and “china’s not even answering the phone” when trump calls!
      the truly powerful don’t need to threaten nor do they need to answer their foes.

      america was long bothered by the fact that they couldn’t touch china, but now it has been scared–VERY scared of china for at least 5 years now, and that fear is growing by the day.

      it has been america that’s been doing the feeble threats.

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    • kommonsense says:

      do u know how much of america’s debt china owns?
      do u know how much of china’s foreign debt anmerica doesn’t own? i’ll give u a hint–what’s zero percent of zero?
      CHINA CAN BUY AND SELL AMERICA MANY TIMES OVER, APPENDAGEHEAD!!!

      the only part of your post that’s truthful is the second line.

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  6. Steve says:

    Divisiveness within POTUS trade counsellors.? On the one hand there is the hardheaded pragmatists firmly rooted in the real world versus the hardliner anti China
    advisers seeking a complete re-evaluation of relationship with China. The hardliners Navarro, Lighthizer & gang of doomsayers are hellbent in encouraging misfortune and disasters in the global economy. Good thing China owns over a trillion US treasury debts and not purchase anymore debts.

    Looks like only Kudlow and Mnuchin are the only true hardheaded pragmatists in multilateral globalism champion by China. The major reasons for the Navarro, Lighthizer hardliner anti China approach is
    1) US will always end up with annual trade losses dealing with China.
    2) US treasury debts will increase annually.
    3) US is no longer competitive on the world market in manufacturing except for high tech which inadvertantly be eroded by China in the next decade or so.
    4) Americans are highly dependent on cheap high quality products.

    China dont have a choice but play hardball against the hardliners. ‘Deal or no deal’ I say No deal. For the next two years Trump will be a lame Donald Duck after the Republicans lost in the midterm elections.

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