Provoking trade disputes is “naked economic terrorism“, a senior Chinese diplomat said on Thursday, ramping up the rhetoric against the US amid a bitter trade war that shows no signs of ending soon.
Zhang Hanhui, China’s vice foreign minister told reporters in Beijing China opposed the use of “big sticks” such as trade sanctions, tariffs and protectionism.
“We oppose a trade war but are not afraid of a trade war. This kind of deliberately provoking trade disputes is naked economic terrorism, economic homicide, economic bullying,” Zhang said, when asked about the trade war with the US.
The comments came after financial markets around the world suffered when Beijing signalled a readiness to strike back at Washington in their escalating trade war by restricting exports of rare-earth elements.
Wall Street recorded steep losses on Wednesday as the Dow Jones slumped to the lowest level in almost four months, losing about 221 points to trade at 25,126. The S&P 500 index also fell to a two-month low, sliding by 19 points to 2,783.
Trade tensions between Washington and Beijing escalated sharply this month after the Trump administration accused China of having “reneged” on its previous promises to make structural changes to its economic practices.
Washington later increased tariffs to up to 25% on $200bn of Chinese goods, prompting Beijing to retaliate.
Everyone loses in a trade war, he added, addressing a briefing on Chinese president Xi Jinping’s state visit to Russia next week, where he will meet Vladimir Putin and speak at a major investor forum in St Petersburg.
“This trade clash will have a serious negative effect on global economic development and recovery,” Zhang added. “We will definitely properly deal with all external challenges, do our own thing well, develop our economy, and continue to raise the living standards of our two peoples,” he said, referring to China and Russia.
“At the same time, we have the confidence, resolve and ability to safeguard our country’s sovereignty, security, respect and security and development interests.”
From combative missives in state media and patriotic fervour on social media, to a mobilisation of ambassadors around the world to get its message out, China has intensified its criticism of Washington since the US this month moved to increase tariffs on Chinese imports and blacklisted Huawei.
On Thursday, a broadcaster from Chinese state television and a Fox Business host staged an unprecedented live debate about the China-US frictions on the US cable network.
Over the past two weeks, China has hinted it might use its dominant position as an exporter of rare earths to the US as leverage in the trade war. Rare earths are a group of 17 chemical elements used in everything from high-tech consumer electronics to military equipment.
On Thursday, the state-run China Daily newspaper said “it would be naive to think that China does not have other countermeasures apart from rare earths to hand”.
“As Chinese officials have reiterated, they have a ‘tool box’ large enough to fix any problem that may arise as trade tensions escalate, and they are ready to fight back ‘at any cost’,” it said in an editorial.
China has consistently rebuffed US complaints about lack of access to its economy for foreign companies, forced technology transfers and intellectual property protection, and repeatedly promised further economic reforms.
Speaking at a separate forum in Beijing, Wang Zhaoxing, a vice chairman of China’s banking and insurance regulator, said the past four decades of the country’s economic reforms had shown that “openness brings progress, shutting off brings backwardness”.
“It is undeniable that the current economic globalisation has indeed encountered some new problems and new challenges,” Wang said. “However, the solution is not to return to protectionism and unilateralism.”