US-China trade talks: Beijing makes 'stern complaints' over American warship in disputed waters

Warship's presence in South China Sea violates Chinese and international law, says Foreign Ministry

Both sides have expressed optimism over the potential for progress in settling their tariff fight over Beijing's technology ambitions (Reuters)

China urged the US to ensure good conditions for progress in trade talks that began Monday in Beijing, complaining over the sighting of a US warship in what it said were Chinese waters.

Foreign Ministry spokesman Lu Kang confirmed on Monday during a routine briefing that the talks had begun. Officials at the American Embassy and China's Ministry of Commerce provided no details on the meeting.

Both sides have expressed optimism over the potential for progress in settling their tariff fight over Beijing's technology ambitions. Yet neither has indicated its stance has changed since a 1 December agreement by Presidents Donald Trump and Xi Jinping to postpone further increases.

The Foreign Ministry said Chinese military aircraft and naval vessels were dispatched to identify the US vessel and warn it to leave the area near disputed islands in the South China Sea.

“We have made stern complaints with the US,” Mr Lu said. He said the warship, which he said was the destroyer the USS McCampbell, had violated Chinese and international law, infringed on Chinese sovereignty and undermined peace and stability.

“As for whether this move has any impact to the ongoing China-US trade consultations... to properly resolve existing issues of all kinds between China and the US is good for the two countries and the world,” Mr Lu said

He added, “The two sides both have responsibility to create necessary and good atmosphere to this end.”

There was no immediate comment from the US side about the Chinese complaint.

The American side in the trade talks was being led by a deputy US trade representative, Jeffrey Gerrish, according to the US government. The delegation includes agriculture, energy, commerce, treasury and State Department officials.

The Chinese government gave no details of who would represent Beijing.

The talks went ahead despite tensions over the arrest of a Chinese tech executive in Canada on US charges related to possible violations of trade sanctions against Iran.

Mr Trump imposed tariff increases of up to 25 per cent on $250bn of Chinese imports over complaints Beijing steals or pressures companies to hand over technology. Beijing responded by imposing penalties on $110bn of American goods, slowing customs clearance for US companies and suspending issuing licenses in finance and other businesses.

Washington, Europe and other trading partners complain Beijing's tactics violate its market-opening obligations.

The standoff also reflects American anxiety about China's rise as a potential competitor in telecommunications and other technology. Mr Trump wants Beijing to roll back initiatives like “Made in China 2025,” which calls for the state-led creation of global competitors in such fields as robotics and artificial intelligence. American officials worry those might erode US industrial leadership.

The ruling Communist Party is reluctant to give up initiatives it sees as a path to prosperity and global influence.

China's leaders have tried to defuse complaints by emphasising its potential as an export market and by promising to increase foreign access to their auto, finance and other industries as well as the technology initiatives.

Economists say the 90-day postponement of additional tariff increases that had been meant to take effect 1 January may be too short to settle the disputes bedevilling US-Chinese relations.

Beijing's goal may be to show enough progress to persuade Trump to extend his deadline, they say.

Cooling economic growth in both countries is turning up the pressure to reach a settlement.

Chinese growth fell to a post-global crisis low of 6.5 per cent in the quarter ending in September. Auto sales tumbled 16 percent in November over a year earlier. Weak real estate sales are forcing developers to cut prices.

The US economy grew at an annual rate of 3.4 per cent in the third quarter, and unemployment is at a five-decade low. But surveys show consumer confidence is weakening because of concern that growth will slow this year.

Beijing has tried in vain to recruit France, Germany, South Korea and other governments as allies against Trump. They criticise his tactics but echo US complaints about Chinese industrial policy and market barriers.

The European Union filed its own challenge in the World Trade Organisation in June against Chinese rules that the 28-nation trade bloc said hamper the ability of foreign companies to protect and profit from their own technology.

For their part, Chinese officials are unhappy with US curbs on exports of “dual use” technology with possible military applications. They complain China's companies are treated unfairly in national security reviews of proposed corporate acquisitions, though almost all deals are approved unchanged.

Some manufacturers that serve the United States have shifted production to other countries to avoid Trump's tariffs.

AP