Xi Says China wants to Work Out Initial Trade Deal with U.S.

China wants to work out an initial trade pact with the United States and has been trying to avoid a trade war, President Xi Jinping said on Friday, but is not afraid to retaliate when necessary, Reuters informs.

Economists warn that a prolonged dispute between the world’s two largest economies is elevating risks to the global economy by disrupting supply chains, curtailing investment and curbing business confidence.

“We want to work for a ‘phase one’ agreement on the basis of mutual respect and equality,” Xi told representatives of an international forum, according to a pool report.

“When necessary we will fight back, but we have been working actively to try not to have a trade war. We did not initiate this trade war and this is not something we want.”

Global financial markets retreated this week on fresh fears that the trade talks could flounder, with U.S. President Donald Trump expected to sign into law two bills backing protesters in the Chinese-ruled city of Hong Kong, Reuters adds.

Concerns of a broader deterioration in Sino-U.S. ties weighed on markets this week. U.S. Navy warships twice sailed near islands claimed by China in the South China Sea in recent days, angering Beijing.

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