Don’t want trade war with US: Chinese Premier

Premier Li Keqiang said there are bright prospects for cooperation with the USA after President Donald Trump pledged to uphold the One China policy on Taiwan that has underpinned relations for decades, adding that China is pushing hard to cut financial risk. He said they should “uphold strategic interests”.

Trump has repeatedly criticized China’s trade practices and threatened to impose punitive tariffs on the country’s imports.

At first glance, the Asian giant’s statements on Chinese trade relations with the U.S. and the world seem to be counterintuitive. “China and the USA have been cooperating with each other for a long time in the Asia-Pacific and we have a wide area of common interests”, he said adding, “We believe areas of cooperation between the two countries will continue to widen”. He noted American companies also would be hurt.

The Chinese premier’s call for reconciliatory dialogue may be a necessary step for Beijing after it supported sanctions against South Korean businesses for Seoul’s joint decision to deploy the USA missile defense system THAAD on the peninsula. “That wouldn’t make our trade fairer”, he added.

Lu Zhengwei, chief economist at China Industrial Bank, said China’s bond market – which is the third largest in the world with 64 trillion yuan ($12 trillion) of debt outstanding – was “attractive to overseas investors” because of relatively high returns. Crisis escalated in Korean Peninsula as North Korea stepped the development of nuclear programme as well as the development of long range missile which can reach USA despite United Nations sanctions.

When asked about the dilemma faced by Southeast Asian countries caught in the growing rivalry between Beijing and Washington in the Asia-Pacific, Li said China did not want to see its neighbours compelled to “pick a side”. “China has no intention to overreach itself”.

“I should point out that 6.5 percent is not a low rate and won’t be easy to achieve…”

On the campaign trail and since his election, President Trump’s blunt criticisms of China have unnerved leaders in Beijing.

“China’s financial system is generally safe”, Li said.

Last year, yuan depreciated by about 6.6 per cent.

The bank’s foreign currency reserves have declined by nearly $1 trillion from a peak of $3.99 trillion in June 2014. The US wants China to use its influence over its close ally North Korea to halt its provocative nuclear and missile programmes.