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China says hard to proceed on trade with US putting ‘knife to its neck’

Beijing : Asian stocks joined a global stock sell-off on Tuesday as an escalating trade fight between the United States and other major economies steered investors away from riskier assets, with markets in China bearing the brunt of investor worries.
“If this continues, it will destroy in an instant the gains of the last four decades of China-U.S. relations,” Wang told members of the U.S.-China Business Council and National Committee on United States-China Relations.
U.S. representatives there included Blackstone Group LP co-founder and Chief Executive Stephen Schwarzman and Mastercard Inc Chief Executive Ajay Banga, the National Committee on United States-China Relations said on its website. Neither Washington nor Beijing looks to be in the mood to compromise in the increasingly bitter dispute, raising the risk of a lengthy battle that could chill investment and disrupt global trade.
U.S. tariffs on $200 billion worth of Chinese goods and retaliatory taxes by Beijing on $60 billion worth of U.S. products including liquefied natural gas (LNG) kicked in on Monday as the trade dispute between the world’s two biggest economies escalated, unnerving global financial markets.China also accused the United States of engaging in “trade bullyism”, and said Washington was intimidating other countries to submit to its will, according to a white paper on the dispute published by China’s State Council, or cabinet, on Monday.
“The sharp criticism (from Beijing on Monday) suggests that China might prefer to wait out the current U.S. administration, rather than embarking on potentially futile negotiations,” Mizuho Bank said in a note to clients. “Given these developments, it is increasingly likely that both sides will not resume negotiations for some time, at least until there is a noticeable shift in the political mood on either side.”
Several rounds of Sino-U.S. talks in recent months have appeared to produce no breakthroughs and fresh negotiations which had been expected in coming weeks have been cancelled after Beijing reportedly decided late last week not to send a delegation to Washington.
One cannot say that all previous trade discussions have been useless, but the United States has abandoned its mutual understanding with China, Wang said. China does not know why the United States has changed its mind after reaching an agreement with China on trade earlier, Wang said, apparently referring to talks in May when it appeared briefly that a framework had been sorted out.
U.S. exporters including LNG suppliers would “certainly” be hurt, but Beijing’s retaliation would provide opportunities to other LNG-exporting countries, Wang said, adding that Australia is an important source of the fuel for China. “China is a big and powerful nation, so whether it is a confrontation with China economically or militarily, it would come at a huge price,” the state-backed Global Times wrote in an editorial on Tuesday. “As such, it is an attractive prospect for other countries including the United States to coexist with China peacefully,” said the newspaper, which is published by the ruling Communist Party’s People’s Daily. (Reporting by Yawen Chen and Se Young Lee Additional reporting by Ben Blanchard, Lusha Zhang and Cheng Fang Writing by Ryan Woo Editing by Eric Meijer and Kim Coghill)