September 28, 2018 / 7:40 PM / 20 days ago

China says 'no cause for panic' over U.S. ties, but won't be blackmailed

UNITED NATIONS/NEW YORK (Reuters) - The Chinese government’s top diplomat, Wang Yi, said on Friday there was “no cause for panic” over friction between Beijing and Washington, but warned that China would not be blackmailed or yield to pressure over trade.

At a U.N. Security Council meeting on Wednesday, U.S. President Donald Trump escalated tensions with Beijing by accusing it of seeking to meddle in the Nov. 6 U.S. congressional elections to stop him and his Republican Party from doing well because of his China trade policies. At the same meeting, Wang rejected the charge.

“Protectionism will only hurt oneself, and unilateral moves will bring damage to all,” Wang said in a speech at the United Nations General Assembly on Friday.

“Regarding trade frictions, China stands for a proper settlement based on rules and consensus through dialogue and consultation on an equal footing. China will not be blackmailed or yield to pressure.”

Trump, who accuses China of stealing U.S. intellectual property, limiting access to its own market and unfairly subsidizing state-owned industries, has escalated his trade war with China and U.S. tariffs on $200 billion worth of Chinese goods kicked in on Monday, prompting Beijing to retaliate with additional tariffs on $60 billion of U.S. products.

Wang earlier told the Council on Foreign Relations in New York that concrete actions had to be taken to maintain relations between the United States and China.

“The closer our engagement, the more closely entwined our interests, maybe various suspicions and even frictions may ensue,” Wang said.

“This is not surprising and it is also no cause for panic. What is important is how these differences should be viewed, evaluated and handled.”

Wang, who holds the twin titles of foreign minister and state councilor, dismissed any suggestion there was forced technology transfer from foreign firms in China and played down complaints by some U.S. firms about market conditions in China.

“A small number of companies that are not so satisfied may speak up louder, but I don’t think they represent the majority of the companies in the Chinese market,” he said.

China's Foreign Minister Wang Yi addresses the United Nations General Assembly at U.N. headquarters in New York, U.S., September 28, 2018. REUTERS/Carlo Allegri

Further cooperation between the United States and China was key in pursuing denuclearization of its ally North Korea, Wang said, while urging the creation of a peace mechanism and for the United States to give North Korea more incentives.

“We believe it is ... right for the U.S. to make timely and positive responses so as to truly meet North Korea halfway,” Wang said in his U.N. speech.

U.S. Secretary of State Mike Pompeo warned members of the United Nations Security Council on Thursday that they must “set the example” by enforcing sanctions on North Korea as China and Russia suggested the council consider easing the tough measures because progress had been made.

Wang warned that scrapping the 2015 Iran nuclear deal, which China and other powers are fighting to save after Trump pulled out of it in May, could lead to a regional arms race.

He said China was fostering closer economic ties with Russia as the two economies were complimentary and Moscow and Beijing were also on the same page on international issues.

“We want to build a new kind of relationship featuring non-confrontation, non-conflict and no targeting any third country,” he said. “Russia is our largest neighbor, and there’s need for normal and friendly ties between neighbors.

“Certainly, the two economies are highly complementary. We need the Russian energy like oil and natural gas and they need Chinese processed goods ... and inexpensive Chinese goods.”

Wang said China had exercised “utmost restraint” in the South China Sea and seeks peaceful solutions to disputes there. He said Beijing’s sovereignty over the South China Sea islands was “very clear” and that people there felt the need for enhanced defenses given “heavy” U.S. military patrols, Wang said.

China claims most of the South China Sea, through which about $3 trillion worth of trade passes every year. Malaysia, Vietnam, the Philippines and Brunei also claim parts of the sea, which has oil and gas deposits and rich fishing grounds.

Wang said that while Asia belonged to the people of Asia, China did not seek a closed continent or to create “a new order” or hegemony.

“China will not, repeat, not repeat the old practice of a strong country seeking hegemony,” Wang said. “I don’t think China will become the United States and China will not challenge the United States, still less will China take the place of the United States.”

Reporting by David Brunnstrom and Rodrigo Campos; writing by John Irish and Michelle Nichols; editing by Grant McCool and Jonathan Oatis

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