China on June 2 made clear that it would not give any ground on core issues of principle despite mounting pressure from US bullying on trade and technology and that it will “fight to the end” if forced, as officials issued a key document that harshly criticizes the US for repeatedly backtracking and jeopardising the trade talks.

China’s Position on the China-US Economic and Trade Consultations released by the State Council Information Office, offered China’s most comprehensive response yet to US accusations since talks broke down last month and clearly draws China’s bottom line for potential negotiations, analysts noted.

“China will not bow under pressure and will rise to any challenge coming its way,” the document read, “China is open to negotiation, but will also fight to the end, if needed.”

Draw bottom line

Though Chinese officials have made similar comments before, it was necessary for China to clarify its stance and draw a bottom line in the trade talks in a written document, given continuing accusations and bullying from US officials, said Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing.

“The US has become so unreliable that we must draw our bottom line clearly. That way, if they can accept it, we can; if not, why waste time?” Tu told the Global Times on June 2.

The white paper stated that China’s “sovereignty and dignity must be respected, and any agreement reached by the two sides must be based on equality and mutual benefit. On major issues of principle, China will not back down.”

The document comes amid looming speculation about whether leaders of the two countries will meet during the G20 summit scheduled later this month in Japan. A meeting between Chinese President Xi Jinping and US President Donald Trump, if it happens, is widely expected to reach some breakthrough as it did in Argentina in December 2018, when they reached a truce.

However, in light of recent US actions, Chinese officials have appeared reluctant to agree to a meeting. Asked about the potential for such a meeting at a press briefing about the white paper on Sunday, Wang Shouwen, a vice commerce minister, said he had no information to offer.

Wang said that China is open to talks but it must be based on mutual respect, mutual comprise and equality. “If we cannot achieve this, then there is no point for consultations; even if we talk, we won’t be able to reach an executable and sustainable agreement,” he said.

Trade talks between the two countries stalled after the US announced on May 6 that it would increase tariffs on $200 billion worth of Chinese goods, accusing Chinese officials for backtracking. The US has also blacklisted Chinese telecom Huawei citing national security concerns.

China has also raised tariffs on $60 billion worth of US goods, which went into effect on June 1, and said that it would establish an “unreliable entity list” of foreign companies and individuals who harm the interests of Chinese companies.

US to blame

The white paper released on June 2 also pushed back on US officials’ accusations that China had backtracked during negotiations.

“The US government should bear the sole and entire responsibility for this severe setback,"” it stated, adding that “the US government’s accusation of Chinese backtracking is totally groundless.”

The document detailed how it was the US that backpedaled three times over the past year.

“Even after China overcame difficulties to find pragmatic solutions to many issues raised by the US, it still wanted a yard after China offered an inch,” said Wang, who is part of the Chinese negotiating team, noting that the US insisted on “unreasonable” demands, including terms that violate China’s sovereignty.

“If the US thinks it can force China to make concessions through maximum pressure and by escalating the trade friction, that’s absolutely impossible,” he said.

“China will definitely not flinch under US pressure,” Song Guoyou, director of Fudan University’s Center for Economic Diplomacy, told the Global Times on June 2, “If the US exerts more pressure, China will certainly take tougher countermeasures to retaliate.”

Though the white paper did not mention any countermeasure, it signals that, if forced, China will take necessary countermeasures, including restricting rare earths export to the US, analysts said.

Asked whether China will restrict rare earths export to the US, Wang said that “it would be hard to accept” if some country uses products made of China’s rare earths to contain China’s development.