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Chinese official tells American investors at a meeting: We don't fear a trade war with the US

CNBC logo CNBC 10/22/2018

Chinese government leaders have a message for American investors: They're not afraid of a trade war with the United States.

On Monday in Beijing, Zhang Qingli, a leading member of a Chinese committee tasked with forging alliances with other nations, told a small group of U.S. business leaders, lobbyists and public relations executives that China refuses to be intimidated by an ongoing trade war with the Trump administration.

"China never wants a trade war with anybody, not to mention the U.S., who has been a long term strategic partner, but we also do not fear such a war," Zhang said through a translator, according to a meeting attendee who declined to be named.

He also accused President Donald Trump's administration of going forward with tariffs even after making progress in trade talks.

"The U.S. side has disregarded a consensus with China after multiple rounds of consultations, insisting on waging a trade war against China and continuing to escalate it. In response, China is left with no other option but to make necessary counter actions," Zhang said, according to the participant in the room at the time.

Zhang's harsh words echoed China's earlier statements about trade tensions with Washington. For the executives in the room on Monday, however, it showed there was no end in sight for the ongoing struggle between the two nations — and that the Chinese are taking a more tempered approach.

The official's "assertion that China doesn't want a trade war but doesn't fear one either showed a tempered resistance to the bolder and more aggressive U.S. posturing," Dan Eberhart, who was one of the 25 corporate leaders in the room at the time, told CNBC in an interview. Eberhart is the CEO of oilfield drilling services company Canary LLC.

Zhang serves on the Committee of the Chinese People's Political Consultative Conference, or CPPCC, a legislative body that's meant to forge and maintain alliances with other countries, including the United States. The meeting involved Zhang and 25 members of the American Chamber of Commerce in Hong Kong.

The group is a sister organization of the American Chamber of Commerce in China, a nonprofit organization representing U.S. companies and individuals looking to invest into the region. AmCham China has over 3,300 individuals and 900 companies. AmCham China is a subsidiary of the U.S. Chamber of Commerce, one of the largest lobbying organizations in the world and an opponent of the tariffs.

A spokeswoman for the U.S. Chamber of Commerce said the meeting was not an event sponsored by the organization and declined to comment further.

Representatives from AmCham China and Hong Kong did not return requests for comment.

The strong words from the vice chairman of CPPCC comes just a month after Trump imposed $200 billion on Chinese imports on top of the $50 billion levy the administration piled onto the country earlier this year. The new trade barrier went into effect in September at a 10 percent rate and is expected to climb to 25 percent in 2019.

China has retaliated with tariffs on up to $60 billion worth of U.S. items, numbering over 5,000. Trump has said he's considering ramping up the trade war with another round of over $257 billion worth of tariffs but that threat has yet to materialize.

Although it is unclear who else attended the gathering, AmCham Hong Kong's executive committee is full of major players in various industries. It's chairman, Jack Lange, is a partner at the international law firm, Paul, Weiss, Rifkind, Wharton & Garrison LLP, according to the groups website. Other notable companies represented include Citigroup, PayPal, FedEx and Universal Pictures.

Disclosure: CNBC and Universal Pictures are part of NBCUniversal, a subsidiary of Comcast.


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