China will defend trade rights in face of Donald Trump's 'trade war', official says

'China has the right to ensure its rights as a World Trade Organisation member,' says Mr Zhang

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China will defend its rights under the World Trade Organisation tariff rules if Donald Trump executes threats he made during his campaign to start a trade war against the country, a senior Chinese official has said.

Zhang Xiangchen, China’s deputy international trade representative, also told a conference in Washington that a broad consensus of academics, business people and government officials have concluded China is not manipulating its yuan currency to gain an unfair trade advantage, as the President-elect has claimed.

Speaking at the 27th US-China Joint Commission on Commerce and Trade conference on Wednesday, Mr Zhang said: “I think after Mr Trump takes office, he will be reminded that the United States should honour its obligations as a member of the World Trade Organisation. And as a member of the WTO, China also has the right to ensure its rights as a WTO member.

He added: “I think people from academic community – business community, as well as government officials have agreed that China is not [manipulating its currency]. China has made substantial progress in reforming its exchange rate mechanism.”

The President-elect has previously said that despite China being America’s biggest trading partner, a trade war was already under way and that the country was a “currency manipulator”.

During his campaign Mr Trump accused China of “raping” the US through its trade policy, telling his supporters it was responsible for “the greatest theft in the history of the world” and claiming the country manipulated its currency to make its exports cheaper, damaging American workers and businesses.

China has already indicated Mr Trump would be “naïve” to start a trade war against the country and that it would respond with “counter-measures” if the US were to act in an aggressive way, threatening to cut cut iPhone sales and order planes from Airbus instead of Boeing if Mr Trump decided to embark on a trade war.

Meanwhile executives from the world’s largest mining company, BHP Billiton, warned Mr Trump’s plan to impose tariffs of up to 45 per cent on Chinese products would cause “global trauma”. Jack Nasser, chairman of the company, said: “The whole world will start to be in complete trauma if tariffs level of that size and magnitude are put on across the world.”

Chinese vice premier Wang Yang reportedly told the conference much progress had been made between China and President Obama's administration in recent years, saying: “We are pleased to note in recent years despite a sluggish global economy and global trade— China-US economic cooperation and trade has defied the downward trend and maintained steady growth and produced many highlights.” 

The official noted that bilateral trade between the US and China has grown 4.8 per cent over the last three years, adding that Chinese investment was directly responsible for creating thousands of US jobs.

Chinese President Xi Jinping spoke with the President-elect after his election victory and said cooperation with the Trump administration was the only way forward, while Mr Trump said the two had established a good relationship and that there was a “clear sense of mutual respect”.