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story.lead_photo.caption A picker cleans dirt off potatoes Wednesday near Idaho Falls, Idaho. China has warned of a 10 percent tariff for frozen potatoes and a 25 percent tariff for dehydrated potatoes, both yet to be implemented.

BEIJING -- China's No. 2 leader appealed Wednesday for support for free trade and promised to improve conditions for foreign companies after tit-for-tat U.S. and Chinese tariff increases in a battle over Beijing's technology policy.

Premier Li Keqiang's comments add to Beijing's effort to portray itself as a defender of global trade in the face of complaints by Washington and other trading partners that China violates its market-opening commitments.

Also Wednesday, a Foreign Ministry spokesman accused Washington of lacking sincerity after it proposed negotiations and then raised tariffs on $200 billion of Chinese goods. But he gave no indication whether Beijing would take part in talks.

China responded to President Donald Trump's tariff increase by imposing its own penalties Tuesday on $60 billion of American imports.

The two countries previously raised import taxes on $50 billion worth of each other's goods in the battle over U.S. complaints Beijing steals or pressures foreign companies to hand over technology.

American officials also object to Chinese plans for state-led development of champions in robotics and other fields. They say that violates Beijing's market-opening commitments and might erode U.S. industrial leadership.

Speaking at a business conference, Li made no direct mention of the tariff fight but called for disputes to be resolved through negotiation.

"It is essential that we uphold the basic principles of multilateralism and free trade," the premier said in a speech at the World Economic Forum in the eastern city of Tianjin.

Disputes "need to be worked out through consultation," said Li, the country's top economic official. "No unilateralism will offer a viable solution."

U.S. Commerce Secretary Wilbur Ross said Tuesday that it was up to Beijing to decide when to talk.

The Foreign Ministry spokesman, Geng Shuang, criticized "U.S. threats, intimidation and blackmail."

"What the United States is doing shows no goodwill and no sincerity," Geng said at a daily briefing in Beijing.

Trump threatened to add $267 billion in Chinese imports to the target list if Beijing retaliated for the latest U.S. taxes. That would raise the total affected by U.S. penalties to $517 billion, covering nearly everything China sells to the United States.

Chinese officials deny foreign companies are required to hand over technology. But auto, pharmaceutical and other foreign companies are required to operate in China through local state-owned partners, which obliges them to share know-how with potential competitors.

Beijing has tried to appear restrained by doing no more than matching Trump's penalties.

Oilseed has become a poster child of the trade war after China in July imposed duties of 25 percent on American shipments. While the commodity wasn't included on the list of retaliatory tariffs the Asian country announced Tuesday, the escalating trade woes continue to drive prices lower.

U.S. soy exports typically soar just after harvesting starts in September, but China's forward purchases have barely budged in recent months. The Asian country is the world's biggest consumer.

U.S. soybean supplies are set to bulge as American farmers are poised to collect the biggest-ever crop, government forecasts show. Meanwhile, China is trying to boost imports of alternative oilseeds like rapeseed and has cut soybean meal use in livestock rations.

"You're going farther away from a resolution rather than closer to one," Matt Gallik, a market analyst for CHS Hedging LLC, said of the trade relations. "You've got a bumper crop in the field coming at you and you're going the wrong way."

China also has threatened "comprehensive measures" as it starts to run out of American imports for retaliation because of the countries' lopsided trade balance.

Li, the Chinese premier, indirectly acknowledged complaints about global trade regulation and affirmed Chinese support for changes.

U.S. officials say the World Trade Organization, the global trade regulator, is antiquated and unable to deal with complaints about Chinese-style industrial policies. Beijing agreed this year to join an initiative with the European Union to propose possible changes.

"We believe we need to uphold the basic international rules and at the same time make improvements to those that need to keep pace with the times," Li said.

Li promised Beijing will refrain from weakening its currency to stimulate exports. China's tightly controlled yuan fell in value against the dollar this year, prompting suggestions Beijing was intentionally depressing its exchange rate to help exporters cope with higher U.S. tariffs. But the central bank has intervened to put a floor under the decline.

"China will never go down the path of stimulating exports by devaluing its currency," Li said.

The premier promised to "improve the business environment" for foreign companies. He affirmed promises to treat companies equally -- a condition to which China committed when it joined the WTO in 2001 but that foreign business groups and governments say it regularly violates.

The EU filed a World Trade Organization challenge in June to Chinese rules on technology licensing that it said give local companies an unfair advantage.

"We will make sure that all companies, be they Chinese- or foreign-owned, so long as they are registered in China, will be treated as equals," Li said.

Chinese growth in investment, factory production and consumer spending have all slowed this year, and its economic growth has slowed alongside. The situation is expected to worsen as effects of the escalating U.S. tariffs ramp up.

While the United States made overtures toward China in recent days to talk trade in Washington this month, some officials said they now doubted Beijing would engage again at a high level until after the midterm elections in November, when President Xi Jinping may meet Trump on the sidelines of an economic summit in Buenos Aires.

Meanwhile, U.S. and Canadian negotiators -- facing a deadline at the end of the month -- are working long hours to keep Canada in a North American trade bloc.

Canadian Foreign Minister Chrystia Freeland resumed talks Wednesday with Robert Lighthizer, the U.S. trade representative.

"Our negotiators have been really hard at it, including an all-night session last night that ended at 7 a.m.," Freeland told reporters.

Trump began negotiations last year to revamp the North American Free Trade Agreement with Canada and Mexico.

The U.S. and Mexico reached a preliminary deal last month designed in part to shift more auto production to the United States. But Canada wasn't part of that agreement. Freeland is trying to get America's No. 2 trading partner back into the trade bloc.

The countries are under pressure to reach a deal by the end of the month when Lighthizer must make public a copy of the full text of the agreement with Mexico. Until then, he has wriggle room to reinstate Canada.

Among other things, the negotiators are battling over Canada's high dairy tariffs and policies meant to keep the country's culture from being overwhelmed by U.S. movies and television. Canada also wants to keep a dispute-resolution process that was part of NAFTA; the Trump administration wants U.S. courts to have jurisdiction.

Information for this article was contributed by Joe McDonald of The Associated Press; by Megan Durisin of Bloomberg News; and by Mark Landler of The New York Times.

A Section on 09/20/2018

Print Headline: China's No. 2 urges support for free trade

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