Veriton Investment

China Urges Its Companies to Avoid Taking Price Wars to the US

(Bloomberg) -- China called on its companies doing business in the US to avoid extending their price wars there — a sign that Beijing is eager to maintain a fragile trade truce reached with Washington.

Commerce Minister Wang Wentao made the comments in a meeting in New York on Tuesday with representatives from 10 Chinese firms in industries such as e-commerce, telecommunications and auto parts, the ministry said in a statement.

Most Read from Bloomberg

Trump Cancels Trail, Bike-Lane Grants Deemed ‘Hostile’ to Cars

Over 5,000 NYC Rent-Stabilized Apartments Headed for Auction

Trump’s Border Czar Involved in Detention Contract Talks Despite Recusal

Tenants Seek to Unionize One Private Equity Firm's Entire Housing Portfolio

Where Modern Art Meets Wild Prairie

Wang said China and the US “have reached a series of important consensus results after several rounds of economic and trade consultations” and it was hoped that businesses understood the situation and “respond positively.” He also called on them to “oppose internal and external involution,” referring to intense competition sparked by excess capacity that forces people to overwork despite diminishing returns.

In July, China’s top leadership emphasized its determination to rein in the phenomenon. The decision-making Politburo vowed to ramp up its management of overcapacity in key industries, and pledged that local government practices in attracting investment would also be regulated.

Wang’s comments signal both a desire to keep relations with the US on track and an acknowledgment of the risks from ramping up exports elsewhere. Shipments to markets such as India, Africa and Southeast Asia have surged during the trade brawl with the US, raising concerns abroad about potential harm to local industries.

US President Donald Trump said last week after a call with President Xi Jinping that he hoped to meet the Chinese leader on the sidelines of the Asia-Pacific Economic Cooperation summit next month. Trump also hailed progress toward finalizing a deal over TikTok. That’s a marked contrast to earlier this year, when trade ties deteriorated as the two sides hit each other with massive tariffs.

China characterized the talks between Xi and Trump as positive and pragmatic, with Xi expressing confidence that Washington and Beijing could handle issues that arose between them. But Xi also suggested that the US should offer a fair environment for Chinese companies to do business, signaling discord over export restrictions and other trade barriers.

Speaking to the business figures in New York, Wang said Beijing “will strive to stabilize China-US economic and trade cooperation in accordance with the central government’s decision-making and deployment, firmly safeguard the legitimate rights and interests of Chinese enterprises, and create a good environment for mutually beneficial cooperation between enterprises of the two countries.”

--With assistance from Twinnie Siu.