China accuses US of 'economic terrorism'

Beijing: In a major escalation of the bruising US-China trade war, Beijing on Thursday accused the US of following "naked economic terrorism" and threatened to stop export of rare-earth metals, a key resource for Apple's Iphones and hi-tech missile guidance systems to America.

The world's two largest economies are engaged in a trade war after talks to resolve the issue between them apparently failed, with US President Donald Trump putting a ban on Huawei, the China's biggest telecom equipment manufacturer, and threatening to slap additional tariffs on the remaining $300 billion worth of Chinese exports.

In the sharpest attack yet on the US, since the beginning of the trade war China's Vice Foreign Minister Zhang Hanhui accused Washington of indulging in "naked economic terrorism".

"We are against the trade war, but we are not afraid of it," Zhang said while briefing media on Chinese President Xi Jinping's trip to Russia next week.

"This premeditated instigation of a trade conflict is naked economic terrorism, economic chauvinism, and economic bullying," he said.

Both the US and China have already imposed tariffs on billions of dollars of export products sparking fears that the conflict between them could damage the global economy.

Trump, who kicked off the trade war last year, demanded China to reduce the massive trade deficit which has climbed to over $539 billion last year.

He insisted Beijing for verifiable measures for protection of intellectual property rights (IPR), technology transfer and more access to American goods to the Chinese market.

The US has imposed a tariff on $200 billion Chinese products while hit back, Beijing increased tariff on $60 billion US products, which will take effect on Saturday.

Underling that there is no winner in a trade war, Zhang said, "This trade conflict will also have a serious negative impact on the development and revival of the global economy".

Meanwhile, in a separate briefing, China's commerce ministry spokesperson, Gao Feng said "Beijing will not allow any countries to use rare-earth materials to make products that will suppress China's development".

When asked if China will stop exporting rare-earth materials to the US, Gao said China has been the world's largest supplier of rare-earth materials and always been keen to meet the demand of its trade partners to promote the rare-earth industry.

"While satisfying domestic demand, China is always willing to fulfil other countries' rightful needs for rare earth materials," he said.

"But if any country plans to use the rare-earth materials that China exports to make products that will suppress China's development, it is not acceptable," he was quoted as saying by the state-run China Daily.

Gao's comments on rare-earth metals came after persistent reports in the state-run media that China would stop exports of rare-earth materials which could affect production of touch phones to guided missiles in the US. China's exports about 71 per cent of the metals around the world.