China says companies facing many difficulties due to trade frictions

Monday, 30 September 2019 00:00 - - {{hitsCtrl.values.hits}}

BEIJING (Reuters): Chinese companies are facing many difficulties due to trade frictions, Commerce Minister Zhong Shan said yesterday.

The US and China have been locked in an escalating trade war for over a year. They have levied punitive duties on hundreds of billions of dollars of each other’s goods, roiling financial markets and threatening global growth.

“Trade faces unprecedented challenges,” Zhong told a news conference in Beijing. “These challenges are both external and internal.”

A new round of high-level talks between the world’s two largest economies is expected in Washington on 10-11 October, led from the Chinese side by President Xi Jinping’s top economic adviser, Vice Premier Liu He.

China will expand imports, and measures to stabilise trade will yield positive results, Zhong add, without giving details. The Trump administration is considering radical new financial pressure tactics on Beijing, including the possibility of delisting Chinese companies from US stock exchanges.

Sources told Reuters on Friday that the move would be part of a broader effort to limit US investments into Chinese companies, in part because of growing security concerns about their activities. The trade war has added to tensions between China and the US, whose ties are also strained over US criticism of human rights issues in China, including protests in Hong Kong, the disputed South China Sea and US support for Chinese-claimed Taiwan.

The Chinese Government’s top diplomat said on Friday that tariffs and trade disputes could plunge the world into recession and Beijing was committed to resolving them in a “calm, rational and cooperative manner”.

The trade war has taken its toll on the Chinese economy.

China’s exports unexpectedly fell in August as shipments to the US slowed sharply, pointing to further weakness in the world’s second-largest economy and underlining a pressing need for more stimulus.

Beijing is widely expected to announce more support measures in coming months to avert the risk of a sharper economic slowdown as the US ratchets up trade pressure.

Despite a slew of growth measures since last year, China’s economy has yet to stabilise. Analysts expect growth could cool further this quarter from a near 30-year low of 6.2% hit in April-June.