US firms will be the first ones to be hit in trade war: China

BEIJING: Chinese premier Li Keqiang today warned the United States that American companies would be the first to be hit in case a trade war sparks off between the two countries. He was answering a reporter's question about implied threats of a trade war by US President Donald Trump, who has promised to impose heavy duties on Chinese goods.

The warning assumes significance because a meeting between Trump and Chinese president is in the offing. The White House has confirmed that negotiations are on to organize the first meeting between the two leaders.

Speaking at his once-a-year press conference, at the end of the annual session of the National People's Conference, Li said, "A trade war would not make our trade fairer."

"If there were a trade war, it would be foreign-funded companies, particularly US firms, that would first bear the brunt," the premier said while explaining that this was the conclusion of a study by a "reputed" international think-tank. He did not name the think tank.

He went on to say that "a closed-door policy or beggar thy neighbour approach will not make anyone the winner." This is seen as a reference to Trump's "America first" policy which favors local business at the expense of international ones.

"No matter what bumps the China-US relations may run into, we hope this relation will continue to move forward in the positive direction," he added.

Li also made a plea to the European Union to relax its restrictions on export of high technology to China because that is what it wants to buy. China would be happy to enlarge its purchases of European goods if EU is prepared to open up high tech exports, he said offering a barter.

One of the thorny issues in the US-China relations is the South China Sea dispute, which is likely to come up during the Trump-Xi meeting. There are signs it will take place in April.

But Li indicated that the problem was not a huge one. "China and the U.S. have been cooperating with each other for a long time in the Asia-Pacific and we have a wide area of common interests," he said adding, "We believe areas of cooperation between the two countries will continue to widen."