China Urges Its Companies to Avoid Price Wars in US Market to Maintain Fragile Trade Relations

Chinese Commerce Minister Wang Wentao

China has issued a call to its companies operating in the United States to refrain from engaging in price wars, indicating Beijing's desire to preserve the delicate trade truce recently established with Washington.

During a meeting held in New York on Tuesday with representatives from ten Chinese companies spanning sectors including e-commerce, telecommunications, and auto parts, Commerce Minister Wang Wentao emphasized this point, according to a statement released by the ministry.

Wang noted that China and the United States "have reached a series of important consensus results after several rounds of economic and trade consultations" and expressed hope that businesses would comprehend the situation and "respond positively." He further urged them to "oppose internal and external involution," referring to the intense competition caused by excess production capacity that forces individuals to overwork despite diminishing returns.

In July, China's top leadership underscored its resolve to curb this phenomenon. The decision-making Politburo committed to enhancing management of overcapacity in key industries and pledged to regulate local government practices in attracting investment.

Wang's remarks indicate both a willingness to maintain stable relations with the United States and a recognition of the risks associated with increasing exports to other markets. During the trade dispute with the US, exports to markets such as India, Africa, and Southeast Asia have increased significantly, raising international concerns about potential negative impacts on local industries.

US President Donald Trump stated last week following a conversation with President Xi Jinping that he hoped to meet the Chinese leader during the Asia-Pacific Economic Cooperation summit next month. Trump also praised progress toward finalizing a deal regarding TikTok. This represents a notable shift from earlier this year when trade relations deteriorated as both nations imposed substantial tariffs on each other.

China described the discussions between Xi and Trump as positive and pragmatic, with Xi expressing confidence in Washington and Beijing's ability to address issues arising between them. However, Xi also suggested that the US should provide a fair environment for Chinese companies to conduct business, indicating ongoing disagreement over export restrictions and other trade barriers.

In his address to business figures in New York, Wang stated that Beijing "will strive to stabilize China-US economic and trade cooperation in accordance with the central government's decision-making and deployment, firmly safeguard the legitimate rights and interests of Chinese enterprises, and create a good environment for mutually beneficial cooperation between enterprises of the two countries."