Speaking at a technology conference in China, Liu added: “We believe that the escalation of the trade war is not beneficial for China, the United States, nor to the interests of the people of the world.”
“We welcome enterprises from all over the world, including the United States, to invest and operate in China,” Liu said. “We will continue to create a good investment environment, protect intellectual property rights, promote the development of smart intelligent industries with our market open, resolutely oppose technological blockades and protectionism, and strive to protect the completeness of the supply chain.”
Asian shares tumbled early Monday, with Japan’s benchmark Nikkei 225 started plummeting as soon as trading began and stood at 20,234.87 in the morning session, down 2.3 percent. Australia’s S&P/ASX 200 slipped 1.5 percent to 6,427.20. South Korea’s Kospi lost 1.7 percent to 1,916.14. Hong Kong’s Hang Seng dropped 3.3 percent to 25,309.37, while the Shanghai Composite was down 1.2 percent at 2,862.87.
The yuan also slipped to 7.1487 to the dollar, weeks after the Treasury Department formally designated China a currency manipulator. The Treasury Department said it will work with the International Monetary Fund to try to rectify the “unfair competitive advantage created by China’s latest actions.”
“The gloves are coming off on both sides and as such yuan depreciation is an obvious cushion against US tariffs,” Mitul Kotecha, an economist at Toronto-Dominion Bank, told Bloomberg News.
There are several reasons why China’s central bank would want to allow the yuan to drop, including to help struggling local exporters who want their products to be less expensive for international purchasers. People’s Bank of China Governor Yi Gang, however, has insisted China does not “engage in competitive devaluation.”
On Sunday, Treasury Secretary Steven Mnuchin told reporters that if “China would agree to a fair and balanced relationship, we would sign that deal in a second.”
Stephen Innes, managing partner at Valour Markets in Singapore, compared the difficulty of assessing the volatile market situation to reading tea leaves.
“Nobody understands where the president is coming from,” he said, adding that the best thing Trump can do for market stability is to “keep quiet.”
“The problem that we’re faced right now is that we are making a lot of assumptions ahead of the economic realities.”
The market is now dominated by fears of a portending U.S. recession, although the American economy is actually holding up, and much of the U.S. economy is made up of consumption, Innes said. If interest rates come down, he added, consumer spending is likely to go up, working as a buffer for the economy.
“What the market’s really waiting for is for them to drop interest rates,” Innes said. “Right now, we are still sitting on that uncertainty.”
Meanwhile, Sen. Lindsey Graham, R-S.C., said on Sunday that Democrats should not criticize Trump for taking on China over trade as they have complained for years about Beijing’s policies but done nothing. Senate Minority Leader Chuck Schumer, D-N.Y, for example, has urged Trump to fight China aggressively.
“Every Democrat and every Republican of note has said China cheats,” Graham said on CBS News’ “Face the Nation.” “The Democrats for years have been claiming that China should be stood up to, now Trump is and we’ve just got to accept the pain that comes with standing up to China.”
U.S. markets have also taken something of a beating. The Dow Jones Industrial Average plunged more than 600 points Friday after the latest escalation in the trade war between the U.S. and China rattled investors. The broad sell-off sent the S&P 500 to its fourth straight weekly loss.
The tumbling began after Trump responded angrily on Twitter following China’s announcement of new tariffs on $75 billion in U.S. goods. In one of his tweets he “hereby ordered” U.S. companies with operations in China to consider moving them to other countries — including the U.S.
Trump also said he’d respond directly to the tariffs — and after the market closed he delivered, announcing that the U.S. would increase existing tariffs on $250 billion in Chinese goods to 30 percent from 25 percent, and that new tariffs on another $300 billion of imports would be 15 percent instead of 10 percent.