China's Xi warns there are 'no winners' in trade war with US

FILE PHOTO: Chinese President Xi Jinping attends the China-Arab summit in Riyadh, Saudi Arabia December 9, 2022. Saudi Press Agency/Handout via REUTERS

Beijing, China — Chinese President Xi Jinping warned Tuesday that there would be “no winners” in a trade war with the United States and promised the country would meet its growth targets for the year.

Former US President Donald Trump – who returns to the White House next month – launched a grueling trade war with China during his first term, lambasting allegations of intellectual property theft and other “unfair” practices .

READ: Automobiles, food: what are the risks linked to Trump's tariff threat?

He has pledged to impose even higher tariffs on China after taking office on January 20, as Beijing grapples with a fragile post-pandemic economic recovery.

“Tariff wars, trade wars and technology wars go against historical trends and economic rules, and there will be no winners,” Xi said of China-US relations during his meeting with several heads of multilateral financial institutions in Beijing, according to public television channel CCTV.

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“China is willing to maintain dialogue with the U.S. government, expand cooperation, manage differences, and promote the development of China-U.S. relations in a stable, healthy and lasting direction,” Xi said.

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Beijing is targeting annual growth of around 5% this year, despite sluggish domestic consumption, high unemployment and a prolonged crisis in the vast real estate sector.

Xi also said during Tuesday's meeting that China had “full confidence” in achieving its 2024 growth target, state media reported.

READ: Trump's tariff plans could 'derail' inflation growth in the United States (Yellen)

His remarks came as official data showed the country's exports grew last month at a slower pace than expected while imports fell further, underscoring the challenges China still faces.

The latest figure reinforced the need for more support, a day after top officials pledged to support faltering growth.

The trade war looms

Overseas shipments this year have represented a rare bright spot in China's economy, with domestic spending mired in a recession and continued woes in the real estate sector spooking investors.

Exports jumped 6.7% year-on-year to $312.3 billion last month, China's General Administration of Customs said.

But that figure is well below the 8.7% expected by economists in a Bloomberg survey and well below the 12.7% jump recorded in October, which was the strongest in more than two years.

Data shows that exports increased by 5.4% year-on-year between January and November.

“Chinese exports may have been the biggest positive surprise for the economy in 2024,” wrote Lynn Song, chief economist for Greater China at ING.

This is “one of the main reasons why China is ready to achieve its growth target of around 5%” for this year, he added.

Analysts have suggested that the recent surge in shipments is because foreign buyers fearing another trade standoff were rushing to circumvent possible tariffs imposed by Trump on Chinese goods.

“We may see some concentration of exports in the coming months, but the momentum is expected to subside once this happens, unless the outcome of the tariff negotiations is surprisingly positive,” Song wrote.

Last month's 3.9 percent drop in imports extended the previous month's decline – and was much worse than the forecast 0.9 percent rise – as domestic demand continues to be held back by sluggish consumer spending.

The figures come as investors closely monitor signals from China's leaders, who are gathering this week in Beijing for a series of key meetings on economic planning for the year ahead.

The Politburo, China's highest decision-making body, called on Monday for “vigorous” support for consumption and an easing of monetary policy in 2025.

But observers are still waiting for the announcement of specific policies, in particular measures aimed at significantly supporting consumption.

Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, said in a note that another key economic policy meeting – expected to take place in the coming days – could “shed more light, especially on the front of budgetary policy”.