China names economic officials amid slow down, Trump threats

AP News
Posted: Feb 24, 2017 5:49 AM

BEIJING (AP) — China's government has named a trade specialist as its new commerce minister and appointed a new head of its top economic planning body as part of a Cabinet reshuffle that comes amid a slowing economy and the threat of increased trade friction with President Donald Trump's administration.

Top trade representative Zhong Shan will become minister of commerce, while He Lifeng will take over the powerful National Development and Reform Commission, the official Xinhua News Agency reported Friday. The appointments are expected to be ratified next month during the national legislature's annual two-week session.

The two new appointees — both of whom have worked in the past with President Xi Jinping — will step into crucial roles guiding the world's second-largest economy at a time when the ruling Communist Party is grappling with an economic growth rate that fell last year to 6.7 percent, its weakest pace since 1990, while exports shrank by 7.7 percent.

Trump, meanwhile, has promised to take a tougher line toward Beijing on trade, raising fears of a slump in commerce between the two key trading partners.

Trump continued his feisty rhetoric on Thursday, calling Beijing the "grand champions" of currency manipulation for allegedly seeking an unfair export advantage by keeping the yuan undervalued. That drew a rebuttal from Chinese foreign ministry spokesman Geng Shuang.

"China has no intention to gain trade advantages by devaluing its currency on a competitive basis," Geng said. "We hope that relevant parties can view the (Chinese currency) exchange rate issue in an objective light and do more that contributes to mutual trust and cooperation."

Despite his tough talk, Trump made no indication that he would make good on his campaign promise to formally declare China a currency manipulator. China in recent months has been spending heavily from its stock pile of foreign currency to shore up the yuan's value amid slowing growth.

Trump's gospel of economic nationalism has also raised concerns in China, particularly his threat to slap tariffs as high as 45 percent on Chinese imports that would likely spark a trade war if carried out.

China's annual legislative session opens March 5 with a focus on keeping the economy moving ahead and creating jobs for laid off workers and recent graduates. It will be followed in the autumn by the Communist Party congress, an event held once every five years at which top party leaders will be named. Xi is expected to stay on for at least one more five-year term as party boss and president.

The lead-up to the congress typically sees reshuffles within the government as internal party factions jockey for influence. While Xi has worked to solidify his political authority within the party by appointing a raft of loyalists, he has also taken to the world stage to declare himself a steadfast champion of globalization.

Chinese policymakers are entering an "uneasy" moment and are seeking to expand trade agreements with countries other than the United States, said Louis Kuijs, head of Asia economics at Oxford Economics and a former China specialist at the World Bank.

"China is quite vulnerable vis-a-vis U.S. measures and they realize they may face attacks out of D.C. that they have to prepare themselves for," Kuijs said.

The appointment of Zhong, a trade specialist who used to work in a trading company himself, reflects Beijing's emphasis on maintaining its competitive position in trade, said Hu Xingdou, a political science professor at Beijing Institute of Technology.

"Appointing him as minister indicates that China will soon engage in more bilateral and multilateral negotiations," Hu said. "China intends to push forward trade globalization and freedom and is determined to be the leader in this respect."

Other new appointments in Friday's reshuffle included Zhang Jun, a high-level official in the Communist Party's anti-corruption agency, as justice minister.