China says U.S. earns blame in trade dispute

Other side has reneged, Beijing claims

BEIJING — China early today issued a report blaming the United States for the two nations’ trade dispute, saying the U.S. has backtracked on its commitments while China hasn’t.

The report from the Cabinet spokesman’s office said China has kept its word throughout 11 rounds of talks.

“A country’s sovereignty and dignity must be respected, and any agreement reached by the two sides must be based on equality and mutual benefit,” it said.

The U.S. has accused China of stealing trade secrets, of forcing technology transfers and of not being sufficiently open to U.S. exports, particularly agriculture. President Donald Trump’s administration has imposed 25% tariffs on $250 billion in Chinese imports and is planning to tax the $300 billion in imports that have so far been spared.

The U.S. has also raised the stakes by putting the Chinese telecommunications giant Huawei Technologies Co. on a blacklist that effectively bars U.S. companies from supplying it with computer chips, software and other components without government approval.

Beijing responded by imposing tariffs of as much as 25% on $60 billion worth of U.S. products, which went into effect Saturday.

Today’s report, published in eight languages, lays out China’s argument for blaming Washington for the frictions as well as the costs to both sides.

“China has kept its word during the consultations,” the report says. “China has emphasized repeatedly that if a trade agreement is reached, it will honor its commitments sincerely and faithfully.”

Wang Shaowen, the vice commerce minister and deputy international trade representative, held a rare news conference after the report’s release. He said China had been forced to “take forceful measures in response” to U.S. actions, and he emphasized China’s contention that it had not backtracked on its earlier commitments, countering claims by Trump and other U.S. officials last month.

“It is irresponsible of the U.S. to accuse and smear China,” Wang said.

In negotiations, “nothing is agreed until everything is agreed,” Wang said, using a line associated with Britain’s efforts to exit the European Union. He said the U.S. had made unacceptable demands, including on tariffs and compulsory requirements that infringed on Chinese sovereignty.

He said of the U.S. tactics: “You give them an inch, they take a yard.”

China also retaliated against the U.S. blacklisting of Huawei by announcing Friday that it will establish its own list of “unreliable entities” consisting of foreign businesses, corporations and individuals that harm the interests of Chinese companies.

That apparently includes FedEx. State media reported Saturday that China has opened an investigation into the U.S. delivery service’s “wrongful delivery of packages.”

Reuters reported that two packages containing documents for Huawei, shipped

from Japan to China, were diverted to the U.S. without authorization and returned to the senders. FedEx apologized last week for delivery errors, saying it values its business in China and its relationship with Chinese clients, including Huawei.

“FedEx will fully cooperate with any regulatory investigation into how we serve our customers,” the company said in a statement Saturday.

Huawei said it’s reviewing its relationship with the delivery service, which is based in Memphis.

China opened the investigation because FedEx violated Chinese laws and regulations and harmed customers by misdirecting packages, the state-run Xinhua News Agency said Saturday.

“Now that China has established a list of unreliable entities, the investigation into FedEx will be a warning to other foreign companies and individuals that violate Chinese laws and regulations,” China Central Television said in a commentary.

China’s Commerce Ministry outlined four factors in deciding whether to place foreign entities on the “unreliable” list, including whether such entities had discriminated against China through a blockade or supply cut, Xinhua

reported Saturday.

MILITARY WARNING

In Singapore, China’s defense minister warned this morning that the country’s military will “resolutely take action” to defend Beijing’s claims over self-ruled Taiwan and disputed South China Sea waters.

Speaking at the Shangri-La Dialogue, an annual forum that focuses on Asian defense issues, Wei Fenghe said: “Should anybody risk crossing the bottom line, the [People’s Liberation Army] will resolutely take action and defeat all enemies.” Wei is the third-highest-ranking general in the People’s Liberation Army.

He defended the country’s right to build “limited defense facilities” in the contested South China Sea, where China’s sweeping claims are challenged by several smaller neighbors.

The remarks came a day after U.S. acting Defense Secretary Patrick Shanahan said at the same gathering that China’s efforts to militarize man-made outposts in the South China Sea are a “toolkit of coercion,” adding that Beijing must end activities the U.S. perceives as hostile.

“If these trends in these behaviors continue, artificial

features in the global commons could become tollbooths. Sovereignty could become the purview of the powerful,” Shanahan said.

But Shanahan also predicted that the U.S. and China would eventually resolve their differences, even as he denounced China for behavior that he said erodes other nations’ sovereignty and “sows distrust” of China’s intentions.

Shanahan said the U.S. is willing to cooperate with China and welcomes it as a competitor.

“Competition does not mean conflict,” he said.

“Competition is not to be feared. We should welcome it, provided that everyone plays by internationally established rules.”

He said the U.S. is strengthening alliances in Asia and “investing significantly” in advanced technology that will be deployed in the region.

But he objected when one participant asked him about a “face-off” between the U.S. and China.

“Is there a face-off?” he said Saturday. “I haven’t seen a trade war. There are trade negotiations that are ongoing. We’re building relations with the Chinese military.”

“Negotiations are always difficult,” he added. “You have two large countries that will eventually resolve these issues.”

Shanahan met with Wei on Friday for 20 minutes in talks described as “constructive and productive,” according to Pentagon spokesman Joe Buccino.

Information for this article was contributed by Claire Che, Tony Czuczka, Glen Carey, Iain Marlow, Philip J. Heijmans, Crystal Chui, Dandan Li, Alfred Cang and Sungwoo Park of Bloomberg News; and by Lolita C.Baldor, Annabelle Liang and Yanan Wang of The Associated Press.