China’s top US trade war negotiator sidesteps growth risks as Beijing digs in for extended battle

13-Jul-2019 Intellasia | South China Morning Post | 6:02 AM Print This Post

China’s economic performance in the first half of 2019 is in line with expectations, according to vice-Premier Liu He, with Beijing seeking to shore up confidence as it digs in for a potentially protracted trade war with the United States.

“Macroeconomic indicators of growth, employment and consumer prices are all in normal ranges,” said Liu, the top economic aide to President Xi Jinping and China’s top negotiator in trade talks with the Trump administration, according to the official state-run Xinhua News Agency.

“The downward pressure on the economy is the result of cyclical, institutional and structural factors. It’s a normal phenomena in the development of the economy.

“The key to countering a variety of risks and challenges [to the economy] is to do our own things well.”



Liu did not specifically mention the trade war with the US at a symposium of local government officials and business delegates from China’s export bases in provinces of Jiangsu, Zhejiang, Guangdong, Henan as well as the city of Shanghai on Thursday, but his comments are seen as a reassurance to not be afraid of an extended trade conflict and to focus on domestic economic issues.

“It’s a move to manage market expectations” when a lot of uncertainties, especially the trade war, are clouding China’s economic outlook, said Raymond Yeung, chief Greater China economist at ANZ Bank.

“The producer price index growth dropped to zero last month, and it showed that the real economy, manufacturing in particular, will continue to be weak.”

China’s producer price index, the price charged to buyers at the factory gates, fell to the brink of deflation at 0.0 per cent in June.

China’s National Bureau of Statistics is scheduled to publish key economic indicators for the first half of the year on Monday, including gross domestic product. China has set a growth target range of 6 to 6.5 per cent for 2019, down from the target of “about 6.5 per cent” set for last year. China’s economy grew 6.4 per cent in first quarter of 2019, beating analysts expectations, but matching the lowest recorded quarterly growth since records began to be published 27 years ago.

A steady performance of the domestic economy could provide Beijing with fresh confidence to take a harder stance in talks with Washington as it would indicate that the US tariffs and the acceleration of the relocation of manufacturing from China to Southeast Asian countries, has not derailed growth.

Liu’s appearance at the symposium came two days after his phone call with US trade representative Robert Lighthiser and US Treasury Secretary Steven Munchin, which was the first contact between top level negotiators since Xi Jinping and US counterpart Donald Trump agreed a trade war truce at the G20 summit at the end of June.

A date for face-to-face talks was not agreed during the call, although trade tensions between China and the US remain high, given there has been little progress to resolve the conflict since the ceasefire was agreed.

On Thursday, Trump accused China of “letting us down” by not promptly buying more US farm products.

“They have not been buying the agricultural products from our great farmers that they said they would,” the US president said on Twitter. “Hopefully, they will start soon.”



Category: China

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