With government ministries closed this week for the lunar new year festival, there was no indication yesterday of whether Peking would accept an invitation for 11th-hour negotiations in Washington over the disregard of intellectual property rights in China. If no agreement is reached by tomorrow night, the US has said it will move to impose punitive tariffs on Chinese imports worth $1bn (£650m). China has vowed to retaliate in kind.
While the official Xinhua news agency was silent on the looming crisis, it did report prominently an unnamed foreign ministry spokesman lambasting the US for "interference in other countries' internal affairs on the excuse of human rights". He was responding to the US State Department's annual global human rights report, published on Wednesday, which cited "widespread" abuses in China, including "hundreds, perhaps thousands" of prisoners of conscience.
Sino-American relations are at their lowest point since President Bill Clinton decided last May to sever the link between trade and China's human rights record. In doing so, he admitted that the threat of commercial sanctions had become an inappropriate weapon with which to press China on questions such as political prisoners. For Washington, the row over China's flagrant abuse of international copyright laws is a more pertinent test of whether the threat of trade sanctions can be effective on commercial issues.
Tomorrow, barring a last-minute agreement by the Chinese to restart talks, Washington will have to decide whether to proceed towards sanctions, or risk weakening its position by extending the deadline. The first stage for Washington is to list Chinese goods which will be subject to 100 per cent tariffs. US officials have said there could be an interval of up to three weeks before tariffs take effect, when it would be possible to return to the negotiating table.
China insists it will publish "counter-retaliatory measures" as soon as the US comes up with its list. Peking plans to target US motor manufacturers and imports including alcohol, cigarettes, and cosmetics.