China's President Xi Jinping, far right, and former US Secretary of State Henry Kissinger, left, helped by a Chinese official, walk to a meeting at the Great Hall of the People in Beijing. Photo: Jason Lee / Pool / AFP

President Xi Jinping has reiterated that China wants to reach an initial trade deal with the United States but is “not afraid” to fight back when necessary.

He made his remarks two days after US President Donald Trump complained that Beijing had not made sufficient concessions, making him reluctant to conclude a bargain.

The world’s two biggest economies have been locked in a bruising trade conflict for more than a year, hitting each other with volleys of tariffs on hundreds of billions of dollars worth of goods.

“As we always said we don’t want to start the trade war but we are not afraid,” Xi told former US officials and other foreign dignitaries at a meeting in Beijing’s Great Hall of the People on Friday.

“When necessary we will fight back but we have been working actively to try not to have a trade war,” he told the group, which included former US Secretary of State Henry Kissinger, former US Treasury Secretary Henry Paulson and former Australian Prime Minister Kevin Rudd.

Top trade negotiators spoke on the phone on Saturday in what the Chinese commerce ministry described as “constructive” discussions on a preliminary deal.

China has insisted on a rollback of existing tariffs, which Trump said he has not agreed to.

“We want to work for a phase-one agreement on the basis of mutual respect and equality”

US Congress approval this week of legislation supporting pro-democracy protesters in Hong Kong has also cast a shadow on the negotiations.

“We want to work for a phase-one agreement on the basis of mutual respect and equality,” Xi told the foreign visitors, who were in town for the Bloomberg New Economy Forum.

Earlier in the week, Kissinger warned that an armed conflict could break out between the US and China if they fail to resolve their trade war.

His sober remarks came at a conference in Beijing on the future of the two economic giants.

“If the conflict is permitted to run unconstrained, the outcome could be even worse than it was in Europe,” Kissinger, who was instrumental in normalizing diplomatic relations in the 1970s between Washington and Beijing when he was former President Richard Nixon’s Secretary of State, said on Thursday.

“World War I broke out because of a relatively minor crisis … and today the weapons are more powerful,” the 96-year-old added.

China and the US have been caught in a trade dispute for 18 months, with the two sides struggling to reach an agreement despite 14 rounds of talks. Tensions have also been running high on the diplomatic front.

Beijing has lashed out at Washington over US naval operations in the disputed South China Sea, while the US has heavily criticized China’s policy of the mass detention of ethnic Uighurs. Capital Hill has also voiced support for the pro-democracy movement in Hong Kong, with protests entering a sixth month.

“China is a major economic country. And so are we,” Kissinger said. “And so we are bound to step on each other’s toes all over the world.”

– additional reporting AFP

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