The People’s Bank of China (“Bank of China”) recently announced that it would encourage Chinese lenders “not to cut off loans” to Chinese exporters that are “facing temporary difficulties” as a result of the duties imposed by the United States on Chinese imports under Section 301 of the Trade Act of 1974. Ji Zhihong, the head of the Bank of China’s Financial Markets Department, stated that, “[i]f there are a market and future for [these exporters’] products, [Bank of China would] give banks reasonable support” to lend to the exporters.

China’s decision to increase lending to exporters who have been affected by the Section 301 tariffs occurred at the same time that China and the United States have downplayed expectations that on-going discussions between the Chinese and U.S. governments would resolve the tensions in their trade relationship. The White House has stated that these discussions have provided the two countries with an opportunity to discuss “how to achieve fairness, balance, and reciprocity in the economic relationship,” while China’s Ministry of Commerce called the talks “constructive and candid.”

Liu Kun, China’s Minister of Finance, stated that “China does not wish to engage in a trade war, but we will resolutely respond to the unreasonable measures taken by the United States. If the United States persists with these measures, we will correspondingly take action to protect our interests.” Mr. Liu characterized China’s approach to date as “responding in a precise way” to the United States’ imposition of tariffs on Chinese imports under Section 301.