China-US Trade Frictions: Expert: China will try not to respond in kind

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Analysts say while the impact of US tariffs on Chinese industries might NOT be on a large scale, they could do real harm in disrupting the market economy, and China doesn't want that. Sun Ye has the details.

A 25 percent tariff on steel and a 10 percent on aluminum imports to the US, starting Friday. Zhou Mi has been monitoring China-US trade for the last decade. He says its impact might be minimal for China's metal export.

ZHOU MI CHINESE ACADEMY OF INT'L TRADE AND ECONOMICS COOPERATION "If we really dig the data, steel and aluminum export from China doesn't account for much, China is not even the top 10 steel exporters to the US and damage should be only on a small scale."

But Zhou says MORE unilateral punitive moves could mean REAL damage, not just in monetary terms but disrupting expectations in the global economy.

ZHOU MI CHINESE ACADEMY OF INT'L TRADE AND ECONOMICS COOPERATION "It sets a bad example as a unilateral act. Not just amount of money, but the visas and block of human movements, it's going to be bad. It's an antithesis to market economy as it doesn't allow market factors to move freely."

That's also why Zhou, who works with the think tank affiliated with the Ministry of Commerce, suggests that while China could respond with tariffs in kind, it will be ultra-cautious in its response.

"We will respond but we will put our WTO commitment first. China is responsible and will consider how its decisions ripple."

SUN YE BEIJING "China's trade surplus with the US grew 13 percent in 2017. And China-US trade volume reached some 580 billion US dollars in 2017. Both exports to the US and imports from the country have seen double-digit growth. And China has repeatedly said that a stable trade relationship between the two is in the interest of both and the world.

Premier Li Keqiang had commented on the situation this week and asked both sides to act "rationally".

LI KEQIANG CHINESE PREMIER "A large trade deficit is not something we want to see, what we want is balanced trade. Otherwise the relations will not be sustainable. China is a responsible and long-term investor globally. It's not necessary to worry about China's development."

He also said China will further open up service and the manufacturing sectors, and create opportunities for the US. Demonstrating a fair share of confidence and consideration in solving trade disagreements WITHOUT resorting to exceptional measures. And that is also the stance that analysts and organizations including the IMF have reiterated recently as the way to go. Sun Ye, CGTN, Beijing.