Beijing - China on Friday accused US officials of lying to the public about their trade war, as rising tensions between the world's two largest economies kept financial markets in a state of unease.
Talks to end the trade dispute collapsed earlier this month,
with the two sides in a stalemate over U.S. demands that China
change its policies to address a number of key US grievances,
including theft of intellectual property and subsidies for state
enterprises.
Washington has slapped higher tariffs on $200 billion in
Chinese goods, prompting Beijing to retaliate, and effectively
banned U.S. firms from doing business with Huawei Technologies
Co Ltd, the world's largest telecom network gear maker.
"Domestically in the United States there are more and more
doubts about the trade war the U.S. side has provoked with
China, the market turmoil caused by the technology war and
blocked industrial cooperation," Chinese Foreign Ministry
spokesman Lu Kang said.
U.S. officials "fabricate lies to try to mislead the
American people, and now they are trying to incite ideological
opposition," he said, when asked about U.S. Secretary of State
Mike Pompeo's recent criticism of Huawei.
In an interview with CNBC on Thursday, Pompeo said Huawei
was connected to the Chinese government, dismissing Huawei chief
executive Ren Zhengfei's assertions that his company would never
share user secrets.
"The company is deeply tied not only to China but to the
Chinese Communist Party. And that connectivity, the existence of
those connections puts American information that crosses those
networks at risk," Pompeo said.
Huawei has repeatedly denied it is controlled by the Chinese
government, military or intelligence services.
Pompeo said he believed more American companies would cut
ties with the tech giant, while the United States has been
rallying its allies to persuade them not to use Huawei for their
5G networks.
U.S. President Donald Trump said on Thursday that U.S.
complaints against Huawei might be resolved within the framework
of a U.S.-China trade deal, while at the same time calling the
Chinese company "very dangerous."
Lu said he did not know what Trump was talking about.
"Frankly, I'm actually not sure what the specific meaning of
the U.S. leader, the U.S. side, saying this is," he said.
World equity markets rebounded on Friday from heavy selling
in the previous day's session. The U.S. dollar was
trading lower against a basket of currencies and prices of
safe-haven U.S. government debt fell.
NO TALKS SCHEDULED
With no further talks between Washington and Beijing
scheduled, investors are nervously eyeing the prospect of an
escalation in the tit-for-tat tariffs the two countries have
slapped on each other's products.
The seeds of the current impasse were sowed when Chinese
officials sought major changes to the draft text of a deal that
the Trump administration says had been largely
agreed.
Trump, who has embraced protectionism as part of an "America
First" agenda, has threatened to slap tariffs of up to 25% on an
additional list of Chinese imports worth about $300 billion.
Meanwhile, China's move to impose higher tariffs on a
revised $60 billion list of U.S. goods is set to go into effect
on June 1.
Financial markets fear the trade war could badly damage
global supply lines and prompt a further slowdown of the world
economy. Economists say the tariffs will curb growth in the
United States and China, two of the more solid economies.
China can maintain healthy, sustainable economic growth even
as it suffers some impact from the trade friction, a senior
official from China's state planner told state television on
Friday.
"China's healthy, steady and sustainable growth can be
maintained in the medium- and long-term," said Ning Jizhe, vice
chairman of the National Development and Reform Commission.
The Trump administration says it is monitoring any possible
impact of tariffs on U.S. consumers. It also announced this week
a new aid package of about $15 billion to help U.S. farmers,
exceeding the up to $12 billion that was rolled out last
year.
American farmers, a key Trump constituency, have been among
the hardest hit in the trade war. Soybeans are the most valuable
U.S. farm export, and shipments to China dropped to a 16-year
low in 2018.
(Reporting by Michael Martina and Ben Blanchard
Writing by Paul Simao
Editing by Rosalba O'Brien)