China’s Top Diplomat Warns Trade War Could Plunge World Into Recession
Wang Yi, China’s foreign minister, speaks during the UN General Assembly meeting in New York, U.S., on Friday. (Photographer: Yana Paskova/Bloomberg)

China’s Top Diplomat Warns Trade War Could Plunge World Into Recession

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(Bloomberg) --

China’s foreign minister hit back at President Donald Trump’s trade policies at the United Nations on Friday, warning that protectionism could plunge the world into a recession just as negotiators from both countries prepare to meet in Washington next month.

Foreign Minister Wang Yi, speaking from the UN General Assembly rostrum days after Trump used the same setting to criticize China’s trade practices, said that “tariffs and provocations of trade disputes” are upsetting the global industrial and supply chain and risk undermining the “global economic and trade order.”

“China will not ever be cowered by threats, or subdued by pressure,” Wang said. “Erecting walls will not resolve global challenges, and blaming others for one’s own problems does not work.”

Wang’s speech came as Trump administration officials discuss ways to limit U.S. investors’ portfolio flows into China in a move that would have repercussions for billions of dollars in investment pegged to major indexes. The news rattled markets, with stocks extending losses Friday on concern the trade war is escalating ahead of planned discussions between both countries.

Trump devoted much of his General Assembly speech on Tuesday to China’s trade practices, accusing Beijing of failing to adopt promised reforms and embracing an economic model dependent on massive market barriers, heavy state subsidies, forced technology transfers and the theft of intellectual property.

He defended his imposition of tariffs, saying he wouldn’t accept a “bad deal.”

As the trade conflict unfolded, China targeted American farmers -- an important political constituency for Trump -- in retaliation for U.S. tariffs, cutting purchases of soybeans and other commodities. Trump has responded with a bailout for farmers that, so far, totals about $28 billion.

“Regarding economic and trade frictions and differences, China is committed to resolve them in a calm, rational and cooperative manner, and is willing to demonstrate utmost patience and goodwill,” Wang said. “Should the other side act in bad faith, or show no respect for equal status or rules in negotiations, we will have to make necessary responses to safeguard our legitimate rights and interests.”

Trade talks are to resume in Washington early in October and China’s Vice Premier Liu He is expected to lead his country’s delegation.

©2019 Bloomberg L.P.

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