China to Ease Rules on Foreign Auto Makers

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China on Tuesday ordered importers of USA sorghum to pay deposits for possible higher tariffs in an anti-dumping investigation, adding to growing trade conflict with Washington.

The Trump administration has recently threatened up to $150 billion worth of import duties on Chinese products ranging from steel to robotics, while China has responded with its own list of USA products that would be subject to higher tariffs - including soybeans, aircraft and automobiles.

Meanwhile, the average price per tonne dropped 31 percent during the same period, which "caused a fall in prices of Chinese sorghum", Wang said.

Germany's BMW, which has a big stake in trade relations between Beijing and Washington as the biggest exporter of vehicles from the United States to China, welcomed the decision.

Beijing launched the sorghum investigation on February 4 in what some businesspeople saw as a warning shot after President Donald Trump hiked tariffs on Chinese-made washing machines and solar modules. The US has trade deficit of United States dollars 500 billion per annum.

China had hit back with tariffs on wide variety of agricultural products such as soybeans, corn, beef, orange juice and tobacco which were expected to hit American farmers.

For the last decade, about 20 percent of China's exports have been ferried to the USA, according to Moody's Investors Services, which forecasts a material macroeconomic impact if Trump makes good on his threats with the consequences vibrating beyond China's end exporters and deep into the economy.

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Wang Hejun, head of the MOC's trade remedy and investigation bureau, said the decision to impose anti-dumping measures on USA sorghum is in accordance with Chinese laws and WTO rules, and is aimed at correcting unfair practices to maintain a heathy trade order.

China will allow full foreign ownership of carmakers in five years, ending restrictions that helped to fuel its trade dispute with US President Donald Trump as it promotes electric vehicle development.

As the tit-for-tat trade battle continues, the two sides' strategies are becoming clear: The US sees China's technology ambitions as the area where it can impose maximum damage, while China is targeting politically inconvenient groups for Trump in hopes of exerting the most leverage. The ruling for anti-subsidy probe will be released later as the two probes involve different procedures and entities, Wang said.

The news came a day after the United States banned U.S. firms from selling parts to Chinese phone-maker ZTE Corps for seven years.

"The biggest challenge for China's economy this year is a possible slump in the growth of consumer spending", said Jiang Chao, chief economist at Haitong Securities.

An official statement from ZTE today said the company is aware of activation of the denial order, and "is communicating with relevant parties proactively in order to respond accordingly".