China cuts some tariffs, ignores US complaints
CHINA ANNOUNCED more tariff cuts Wednesday on imports of construction machinery and other goods, but took no action to address the complaints from the United States about its technology policy.
The move reflects the Chinese government’s desire to stick to plans to make the economy more competitive and its intention to press on with stateled development of industry. It gave no indication the reductions would apply to US goods, on which Beijing has imposed additional taxes of five to 25 per cent.
The tariff cut, effective November 1, applies to 1,585 types of goods, including construction equipment, industrial machinery, paper products and building materials. It is the second reduction in less than a year following a cut last November for food and consumer goods.
President Xi Jinping’s administration has this year announced a series of measures to open up the Chinese market to outside competition, but none addresses US complaints that the government steals or pressures foreign companies into handing over technology.
The United States, Europe and other trading partners say initiatives such as ‘Made in China 2025’, which calls for state-led creation of champions in robotics and other fields, violate Beijing’s obligations to open up its market to foreign companies. American officials worry they might erode US industrial leadership.
US President Donald Trump went ahead Monday with a tariff increase on US$200 billion of Chinese goods. Beijing responded by imposing penalties on US$60 billion of American products. That was on top of an earlier duty increase by both sides on US$50 billion of each other’s goods.
Negotiations were impossible while Washington “holds a knife” to Beijing’s neck by imposing tariff hikes, a Chinese deputy commerce minister, Wang Shouwen, said Tuesday.
A Chinese government report on Monday accused Trump of bullying other countries and destroying “mutual trust” required for international relations. That dampened hopes for a settlement and prompted suggestions that China might go so far as waiting for Trump to leave office instead of negotiating.
Meanwhile, experts are trying
to understand what economic impact the trade war might have.
In research published Wednesday, economists at the European Central Bank said they simulated a wide-ranging trade war and found it would hurt the United States economy significantly, making households poorer and destroying jobs, while China would not suffer as much.
The Asian Development Bank said Wednesday that trade conflicts, rising debt and the potential impact from rising interest rates in the US will likely dampen growth in the coming year.
The regional lender, based in Manila, Philippines, said it expects economic growth in Asia to remain at a robust 6.0 per cent in 2018 but to slip to 5.8 per cent next year. China’s economy is expected to expand at a 6.6 per cent annual pace this year but slow to 6.3 per cent in 2019, it said.