Chinese media alarmed at Trump trade adviser, warn of U.S. showdown

[December 23, 2016]  BEIJING (Reuters) - Chinese state media on Friday expressed alarm and warned of a "showdown with the U.S." after President-elect Donald Trump named Peter Navarro, an economist who has urged a hard line against China, to head a new White House National Trade Council.

And the Chinese Ministry of Commerce stressed that China-U.S. trade benefits both sides, warning Washington's new administration against moves that may hurt ties.

Navarro is an academic and one-time investment adviser who has authored books such as "Death by China: How America Lost its Manufacturing Base". The book was made into a documentary film about Beijing's desire to become the dominant economic and military power in Asia.

"That individuals such as Navarro who have a bias against China are being picked to work in leading positions in the next administration is no laughing matter," the official English-language China Daily said in an editorial.

"The new administration should bear in mind that with economic and trade ties between the world's two largest economies now the closest they have ever been, any move to damage the win-win relationship will only result in a loss for both sides."

China's Foreign Ministry said in reaction on Thursday it was playing close attention to Trump's transition team and possible policy direction and that cooperation between the two countries was the only choice.

Trump, a Republican, made trade a centerpiece of his presidential campaign and railed against what he said were bad deals the United States had made with other countries. He has threatened to hit Mexico and China with high tariffs once he takes office on Jan. 20.

Shen Danyang, spokesman for the ministry of commerce, told a news briefing in Beijing on Friday that the United States would continue to see mutual benefits from trade with China, and said the pattern of deepening cooperation would continue.

"Regardless of what changes happen in the U.S. government - president, commerce secretary, trade representative - common interests (between the United States and China) are greater than differences," Shen said.

But the United States needed to be careful not to repeat mistakes, Shen said.

"We oppose the idea of making others take medicine when oneself is sick. This has happened in the past and could happen in the future," Shen said, without elaborating.

Tough trade measures against China are often met with retaliatory actions, including countervailing tariffs or fines against U.S. companies in China.

President-elect Donald Trump talks to members of the media after a meeting meeting with Pentagon officials at Mar-a-Lago estate in Palm Beach, Florida, U.S., December 21, 2016. REUTERS/Carlos Barria

China on Friday said General Motors Co's <GM.N> joint venture would be fined 201 million yuan ($28.94 million) for monopolistic pricing, ending speculation after the China Daily reported on Dec. 14 that China would fine a U.S. automaker.

Auto industry sources have told Reuters the investigation was already under way before Trump's recent comments, although it has raised fears that China could be seizing on the case to send a shot across the bow at the incoming U.S. administration.

The Global Times, an influential tabloid published by the ruling Communist Party's official People's Daily, said Trump's choice of Navarro was "by no means a positive signal".

"China needs to face up to the reality that the Trump team maintains a hard-line attitude toward China. It must discard any illusions and make full preparations for any offensive move by the Trump government," it said in an editorial.

"China is powerful enough to withstand pressures from the Trump government. Beijing will get used to the tensions between the two countries. If Washington dares to provoke China over its core interests, Beijing won't fear setting up a showdown with the U.S., pressuring the latter to pay respect to China."

Navarro, 67, a professor at University of California, Irvine, advised Trump during the campaign.

As well as describing what he sees as America's losing economic war with China, Navarro has highlighted concerns over environmental issues related to Chinese imports and the theft of U.S. intellectual property.

($1 = 6.9445 yuan)

(Reporting by Ben Blanchard and Elias Glenn; Editing by Michael Perry and Nick Macfie)

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