China does not expect a trade war, as no side will win, but if the country is forced to, it has no fear of one, said Chinese Minister of Commerce Zhong Shan when meeting with former U.S. Treasury Secretary Henry Paulson on March 25. 

China has repeatedly made clear its attitude that it hopes for no trade war, as all sides will lose, Zhong noted, adding that cooperation is the only option for the two sides.

He also stressed that China fears no trade war and furthermore that China will not sit idly. China is still focused on resolving disputes with the U.S. through dialogue but is fully prepared to respond if necessary.

Paulson noted that Sino-U.S. relations are some of the most important during this century, and that only cooperation between the two sides could drive global economic growth.

Paulson also disclosed that the U.S. industrial and commercial circles, as the main force that supports development of the Sino-U.S. relationship, like China also does not hope a trade war between the two sides. To some degree they represent the voice of U.S. business circles.

US President Donald Trump signed a memorandum on March 22 that could impose tariffs on imports of Chinese products worth $60 billion, fueling fears that the world’s two largest economies could be heading toward a trade war.

The U.S., regardless of WTO rules, persists in advancing a Section 301 investigation, which is undoubtedly unilateralism and trade protectionism.

In addition, many believe that recent trade investigations initiated by the U.S. are specifically targeting China, said Vice-Minister of Commerce Wang Shouwen.

Taking the U.S. Section 232 Investigation into the steel and aluminum imports from China as an example, the steel imports from China account for less than 3 percent of its total, which is unlikely to pose a threat to its national security. The U.S. imposes tariffs on the imports from China, while it exempts those from other countries, Wang explained.

Wang added that the investigation, going against WTO rules, is neither in the interest of the U.S. nor of China.

China now remains calm and restrained, but this does not mean it can do nothing, said Hu Yijian, president of Institute of Public Policy and Governance at Shanghai University of Finance and Economics.

Hu remarked that how far the trade war will go depends on how far the U.S. goes. China can take measures in lots of sectors as a form of retaliation, including soybeans and airplanes, which are all replaceable.

As the world’s second largest economy, China has the confidence to take strong measures to fight back, said Dong Ximiao, a senior researcher at the Chongyang Institute for Financial Studies, Renmin University of China, adding that China can impose tariffs on 128 types of imports from the U.S. to precisely hit where it hurts.