A Chinese national flag flies above the Pearl River in Guangzhou, Guangdong province, China. Picture: REUTERS
A Chinese national flag flies above the Pearl River in Guangzhou, Guangdong province, China. Picture: REUTERS

Shanghai/Beijing — Chinese state media on Monday lashed out at US President Donald Trump’s trade policies in an unusually personal attack, and sought to reassure investors worried about China’s economy as growth concerns rattled its financial markets.

China’s strictly controlled news outlets have frequently rebuked the US and the Trump administration as the trade conflict has escalated, but they have largely refrained from specifically targeting Trump.

The latest criticism from the overseas edition of the ruling Communist Party’s People’s Daily newspaper singled out Trump, saying he was starring in his own "street fighter-style deceitful drama of extortion and intimidation".

The paper’s vitriol follows Trump’s comments on Twitter from Saturday in which he boasted that his strategy of placing steep tariffs on Chinese imports was "working far better than anyone ever anticipated", and that Beijing was now talking to the US about trade.

Trump’s desire for others to play along with his drama was "wishful thinking", a commentary on the paper’s front page said, arguing that the US had escalated trade friction with China and turned international trade into a "zero-sum game".

"Governing a country is not like doing business," the paper said, and Trump’s actions imperilled the national credibility of the US.

The heated dispute between the world’s two biggest economies has roiled financial markets including stocks, currencies and the global trade of commodities from soybeans to coal in recent months.

The US and China implemented tariffs on $34bn worth of each other’s goods in July. Washington is expected to soon implement tariffs on an additional $16bn of Chinese goods, which China has already said it will match immediately.

On Friday, China’s finance ministry unveiled new sets of additional tariffs on 5,207 goods imported from the US worth $60bn.

That move was in response to the Trump administration’s proposal of a 25% tariff on $200bn worth of Chinese imports.

The trade war, rising corporate bankruptcies, and a steep decline in the value of the yuan versus the dollar have raised concern that China’s economy could face a steeper slowdown.

The government has responded by releasing more liquidity into the banking system, encouraging lending and promising a more "active" fiscal policy.

US companies are putting in place measures to cushion the impact of the trade row, including price hikes, and a number of companies — from industrial firms to home furnishers and toy makers — have said they will move some sourcing and manufacturing outside of China.

Stock market swings

In his Twitter comments on Saturday, Trump cited losses in China’s stock market as he predicted the US market could "go up dramatically" once trade deals were renegotiated.

China’s stocks were lower early on Monday as Beijing’s latest tariff threats escalated the tit-for-tat Sino-US trade war, though the central bank’s efforts to shore up the tumbling yuan helped to stabilise the currency. The stock market also later turned positive.

But a flurry of articles in Chinese state media emphasised the resilience of China’s economy and downplayed concern about the impact of the Sino-US trade war.

"Market participants foresee a relatively stable Chinese currency in the near term, without fear of impacts from the US-China trade dispute. They expect solid economic growth momentum amid policy fine-tuning," an article in the official English-language China Daily newspaper said, citing Chinese economists.

On Friday, the People’s Bank of China said it would require banks to keep reserves equivalent to 20% of their clients’ foreign exchange forwards positions from Monday, in a move to stabilise the yuan.

"Leading China’s economy on a stable and far-reaching path, we have confidence and determination," another commentary in the main edition of the People’s Daily said.

Trump has threatened tariffs on more than $500bn in Chinese goods, covering virtually all US imports from the Asian giant, demanding that Beijing make fundamental changes to its policies on intellectual property protection, technology transfers and subsidies for high technology industries.

The nationalist Global Times, responding in an editorial late on Sunday to White House economic adviser Larry Kudlow’s remarks that China should not underestimate Trump’s resolve, said China did not fear "sacrificing short-term interests".

"China has time to fight to the end. Time will prove that the US eventually makes a fool of itself," the Global Times said.