Senior Chinese diplomat says China, U.S. must avoid Cold War mentality

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To bolster its claim to being the reasonable party in the dispute, the Chinese government Monday released a white paper to "clarify" the facts around the trade friction.

The U.S. trade chief was meeting on Tuesday with his counterparts from Japan and the European Union as part of regular talks to deal with China's non-market policies and to craft reforms to World Trade Organization rules. USA administrations have been trying to do this for decades, often preferring a multilateral approach.

According to the minister, over 40 years of diplomatic relations between China and the United States, the two sides have made an important conclusion - cooperation will bring benefits to all, but confrontation will bring only harm.

US representatives there included Blackstone Group LP (BX.N) co-founder and Chief Executive Stephen Schwarzman and Mastercard Inc (MA.N) Chief Executive Ajay Banga, the National Committee on United States-China Relations said on its website.

William Zarit, chairman of American Chamber of Commerce in China, said that while both countries had benefited from their trade relationship, many U.S. firms had other grievances.

China summoned the US ambassador in Beijing and postponed military talks in protest against a USA decision to sanction a Chinese military agency and its director for buying Russian fighter jets and a missile system.

Already Chinese producers are turning to non-American sources for their needs and the combination of higher tariffs on U.S. goods and lower duties on other goods will likely speed up that shift.

It sharply criticized the "protectionism" of the "America First" policy of the USA administration - without singling out Trump by name.

"Given these developments, it is increasingly likely that both sides will not resume negotiations for some time, at least until there is a noticeable shift in the political mood on either side". China's customs agency said it responded at noon by beginning to collect taxes of 5 or 10 percent on a $60 billion list of 5,207 American goods, from honey to industrial chemicals.

"Trump and Xi were never friends", said Bonnie Glaser, a China expert at the Center for Strategic and International Studies in Washington.

China does not know why the United States changed its mind after reaching an agreement with China on trade earlier, Wang said. The two countries haven't held high-level talks since June.

"It's like saying, 'I'm going to hit you in the face, and if you fight back, I'm going to hit you some more, ' " said Yu Yongding, a senior researcher at the Chinese Academy of Social Sciences.

But he said the government is working to accommodate their needs and reduce their tax burdens.

Iris Pang, an economist at ING in Hong Kong, said the Chinese document read like the United States report that sparked the trade war. Beijing has denied that USA companies are forced to transfer technology and sees Washington's demands on rolling back its industrial policies as an attempt to contain China's economic rise.

"Cutting tariffs makes a lot of sense", Alden said.