China seeks to avoid trade war with US

"We do not want to see any trade war breaking out between the two countries. That would not make our trade fairer," Premier Li stated on Wednesday as the NPC's annual legislative gathering wrapped up after ten days.

His words echoed those of Chinese Commerce Minister Zhong Shan, who called earlier in the conference to maintain mutually beneificial US-China trade relations.

Li also signaled China was willing to make its state-run economy more accessible for foreign investment despite "frictions in trade and investment."

"China will continue to open to the outside world," the premier said. "We welcome other partners to share with us in the development opportunities of China."

China - a free trade defender?

At first glance, the Asian giant's statements on Chinese trade relations with the US and the world seem to be counterintuitive. After all, the heavily planned economy includes a large share of government-owned industry and a strict regulation of currency reserves to ensure low-cost and competitive goods.

However, with the Trump administration's decision to withdraw the US from the Trans-Pacific Partnership trade deal and prophecies of increasing protectionism, China could very well step into the vacuum as a leader of international free trade as they seek to reduce state debt and boost consumer spending.

Li stated that China would like to work with its Asian neighbors to promote regional trade as well, a declaration aimed at alleviating concern that China could become too economically powerful. But Li said neighboring countries need not fear.

 "We have an open mind and we are ready to work together with others," Li said. "China has no intention to overreach itself."

Li also promised to continue reforming the yuan exchange rate mechanism based on market values and not to depreciate currency in order to feed export demands.

Navigating the US-China relationship

Since taking office, US President Trump has unsettled Chinese leaders with his accusations of currency manipulation and his warnings of future import taxes to be applied to Chinese goods entering the US, as well as with his suggestion that the US may not stick to the "One China" policy that does not recognize an independent Taiwan.

In his closing remarks, Li described the "One China" policy as the "foundation" of his country's relationship with the US that "cannot be undermined."

In a phone call with Chinese President Xi Jinping in February, however, Trump reaffirmed America's recognition of a single, unified China. 

Media reports indicate that Trump has plans to host Xi in Florida in April in what would be the two world leaders' first face-to-face meeting.

cmb/rt (Reuters, AP)