China's state media has lashed into a United States announcement that it would press ahead with restrictions on investment by Chinese companies, saying Beijing was ready to fight back if Washington was looking to ignite a trade war.
The US said on Tuesday that it still held the threat of imposing tariffs on $US50 billion of imports from China and would use it unless Beijing addressed the issue of theft of American intellectual property.
The declaration by the White House came after the two sides had agreed earlier this month to look at steps to narrow China's $US375 billion trade surplus with America, and days ahead of a visit to the Chinese capital by US Commerce Secretary Wilbur Ross for further talks.
China commerce's ministry reacted swiftly overnight with a short statement, saying it was surprised and saw it as contrary to the consensus both sides had reached recently.
Chinese tabloid the Global Times said the United States was suffering from a "delusion" and warned that the "trade renege could leave Washington dancing with itself".
The widely read Global Times is run by the ruling Communist Party's official People's Daily, although its stance does not necessarily reflect Chinese government policy.
"The Chinese government will have the necessary measures in place to deal with a US. withdrawal from any settled agreement. If the US wants to play games, then China would be more than willing to play along and do so until the very end," it said.
Fears of a trade war between the world's two biggest economies had also receded after the Trump administration said it had reached a deal that would put ZTE Corp back in business after banning China's second-biggest telecoms equipment maker from buying US technology parts.
Still hanging in the balance, however, is San Diego-based Qualcomm's proposal to acquire NXP Semiconductors NV - a $US44 billion deal that requires clearance from China's antitrust regulators.
State news agency Xinhua said China hoped that the United States would not act impulsively but stood ready to fight to protect its own interests.
"China's attitude, as always, is: we do not want to fight, but we are also not afraid to fight," it said in a commentary.
"China will continue to hold pragmatic consultations with the United States' delegation and hope that the United States will act in accordance with the spirit of the joint statement," it said.
Commerce Secretary Ross is scheduled to visit Beijing from June 2 to June 4 to try and get China to agree to firm numbers for additional U.S. exports to the country.
The deal to reduce China's trade surplus with the US was separate from the U.S. probe into China's alleged theft of intellectual property.
A White House official said on Tuesday that the US government plans to shorten the length of visas issued to some Chinese citizens as part of a strategy to prevent intellectual property theft by US rivals.
Citing a document issued by the Trump administration in December, the official said the US government would consider restrictions on visas for science and technology students from some countries to ensure "intellectual property is not transferred to our competitors."
The China Daily newspaper said the repeated US claim that China had forced foreign firms to transfer their technologies to Chinese businesses was without evidence and was being used as an excuse to facilitate its trade protectionism.
It said technology transfers between US companies and their Chinese partners were the result of normal business practices, not coercive policies.
(Reporting by Brenda Goh in Shanghai and Ryan Woo in Beijing; Editing by Kim Coghill)