BEIJING, Dec 11 (Alliance News): Chinese leader Xi Jinping has strongly warned the United States against reigniting a trade war, emphasizing that there would be “no winners” and vowing to protect China’s economic interests.
His remarks came during a Tuesday meeting with heads of global financial institutions such as the World Bank and the International Monetary Fund.
This warning follows a significant development where Chinese regulators launched an antitrust investigation into American chip manufacturer Nvidia.
This move is seen as an escalation in the competition for AI dominance, a race both nations deem vital for national security.
“Tariff wars, trade wars, and technology wars go against the historical trend and economic laws, and there will be no winners,” Xi said, according to state broadcaster CCTV. “Building ‘small courtyards with high walls’ and ‘decoupling and breaking chains’ will hurt others and not benefit oneself,” he added, underscoring China’s belief that mutual prosperity benefits the world.
US National Security Advisor Jake Sullivan has previously used the phrase “small yard and high fence” to describe limiting trade with China while keeping most commercial activities intact.
The Biden administration last week imposed a third round of export restrictions on China, targeting semiconductor manufacturing equipment and advanced chips, as well as more than 100 Chinese firms.
Meanwhile, former President Donald Trump has indicated plans to increase tariffs on Chinese goods if he returns to office, proposing a 10% tariff on top of existing ones unless China curbs illegal drug exports to the US.
Economic Challenges in China
China’s economy is under pressure, with exports playing a crucial role as domestic demand weakens. Official figures revealed that exports in November grew by only 6.7%, falling short of the 8.5% forecast and significantly down from the 12.7% growth in October. Imports also unexpectedly declined, signaling potential difficulties ahead.
Zichun Huang from Capital Economics noted that while US tariffs could impact export volumes by around 3%, their effects might not be felt until mid-2024. Despite the threats, there is speculation that US firms may increase orders in anticipation of higher tariffs.
To mitigate economic challenges, the Communist Party’s Politburo announced on Monday that it would adopt a “moderately loose” monetary policy for the upcoming year, its first such move since 2010.
Economists anticipate that China may seek to strengthen trade relations through measures like lower export tax rebates and clearer regulations involving government procurement.
