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China, US too intertwined to ‘break up’ despite trade war, Xi Jinping says in Russia

Xi Jinping described Donald Trump as a friend during his speech in St Petersburg on Friday. Photo: AP. Sketched by the Pan Pacific Agency.

ST. PETERSBURG, Jun 8, 2019, SCMP. Chinese President Xi Jinping has warned against a decoupling of the US and China as trade tensions between the world’s two largest economies continue. Speaking to businessmen and officials at the St Petersburg International Economic Forum on Friday, Xi, sitting with his Russian counterpart Vladimir Putin, said he believed disengagement would be dangerous and that his “friend”, US President Donald Trump, would share the same view, reported the South China Morning Post.

“There are some trade frictions between us and the US, but China and the US are closely intertwined, and we are each other’s biggest investor and trade partner,” he said.

When asked if he thought China’s relationship with the US should be adjusted as globalisation has come under pressure, Xi said: “More than 10,000 people fly between China and the US on a daily basis, which is about 4 million [people] a year.”

“I can hardly imagine a complete decoupling between China and the US. This is not the case that I would like to see, and I don’t think our American friends want to see it, and my friend [Donald] Trump wouldn’t want to see it either.”

It was the first time Xi had openly referred to the US president as a “friend”, while Trump has used the word repeatedly about the Chinese leader as evidence of his success in dealing with Beijing, despite the ongoing trade war.

An almost year-long trade negotiation aimed at resolving the two countries’ disputes collapsed last month, just days before Trump increased the tariff rate on US$200 billion worth of Chinese goods. Beijing retaliated by announcing higher tariffs on US$60 billion worth of US imports that came into effect at the start of June.

On Thursday, Trump raised the stakes once more by saying on Twitter that he might consider increasing tariffs on all Chinese goods imported by the US, possibly two weeks after the G20 summit in Osaka, Japan at the end of this month.

Meanwhile, Beijing has intensified its trade war rhetoric against Washington, after the US, citing national security concerns, imposed a supplier ban on Huawei Technologies Co, China’s leading telecommunications equipment firm.

Beijing has also indicated that it could tighten its export controls on rare earths if Washington continued to pile on the pressure.

On Friday, however, Xi took a more conciliatory tone, saying he was committed to seeking a resolution to the trade war and to promoting global trade.

“I want to be a constructor, not a destroyer, and we should respect the things that already exist and do our best to improve them, instead of tearing them down,” he said.

“I don’t want to be a wall builder or a ditch digger, and all I have been doing is to expand my circle of friends.”

Xi’s remarks came amid growing concern that the world economy is on the brink of its worst setback in decades as its two biggest economies continue their tit-for-tat fight on trade, technology and national security.

Meanwhile, Yi Gang, the governor of the People’s Bank of China, is expected to meet US Treasury Secretary Steven Mnuchin in Japan over the weekend during a two-day gathering of finance leaders from the Group of 20 economies. It will be first face-to-face talks between key trade negotiators from the two countries in nearly a month.

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