A senior Chinese diplomat warned Washington that Beijing is “not afraid of a trade war” just hours after a Chinese newspaper said it was ready to use rare earths as leverage in their increasingly hostile dispute. China and the US have been locked in a trade war for several months now, with US President Donald Trump recently raising tariffs on a list of $200billion worth of Chinese imports from 10 percent to 25 percent. The American leader has also threatened to slap 25 percent tariffs on an additional $300billion worth of Chinese goods should the nations fail to reach an end-game in their trade spat. China has retaliated to US aggression by raising duties on a revised list of $60billion worth of US products to as high as 25 percent.
Zhang Hanhui, China’s vice foreign minister told reporters in Beijing: “We oppose a trade war but are not afraid of a trade war.
“This kind of deliberately provoking trade disputes is naked economic terrorism, economic homicide, economic bullying.”
He added the trade clash “will have a serious negative effect on global economic development and recovery”.
Referring to China and Russia, where Chinese president Xi Jinping’s will make a state visit to next week, he said: “We will definitely properly deal with all external challenges, do our own thing well, develop our economy, and continue to raise the living standards of our two peoples.
“At the same time, we have the confidence, resolve and ability to safeguard our country’s sovereignty, security, respect and security and development interests.”
In latest developments, China’s Communist Party newspaper, People’s Daily, this week noted how the US has an ”uncomfortable” dependence on rare earths, a group of 17 chemical elements used in everything from high-tech consumer electronics to military equipment.
In a direct message to Washington, the paper said Beijing was ready to use its supply of rare earths in the increasingly hostile tit-for-tat trade spat, declaring: “Don’t say we didn’t warn you.”
The paper wrote: “Will rare earths become a counter weapon for China to hit back against the pressure the United States has put on for no reason at all? The answer is no mystery.
“Undoubtedly, the US side wants to use the products made by China’s exported rare earths to counter and suppress China’s development.
“The Chinese people will never accept this!”
The comments came after President Trump said he was “not yet ready” to make a deal with China over trade while warning tariffs could rise “very substantially”.
Speaking during a joint press conference in Japan with Prime Minister Shinzo Abe, the US leader said he expects that ”somewhere in the future” a trade agreement will be concluded.
He added: “As far as China is concerned, they want to make a deal.
“I think they probably wish they made the deal that they had on the table before they tried to renegotiate it.”
Hong Kong stocks closed at a four-month low on Thursday amid the rising rhetoric from Beijing.
The Hang Seng index ended down 0.4 percent at 27,114.88 points, its lowest closing level since January 24.
The China Enterprises Index closed up 0.6 percent at 10,450.09 points.