China both hopeful and on edge as Trump returns to White House

Beijing: Chinese officials and ordinary people are hopeful but on edge as Donald Trump returns to the White House, eager to avoid a repeat of the bruising trade war that drove a wedge between the economic superpowers during his first term.

Chinese Vice President Han Zheng, in meetings with Tesla CEO Elon Musk and other members of the US business community in Washington ahead of Trump's inauguration, said he hoped US companies would "take root" in China and help to stabilise bilateral relations, according to the official Xinhua news agency.

When Trump was last president, he heaped tariffs on more than $300 billion of Chinese imports. In recent months, he has said he would add tariffs of at least 10 per cent on top of what is already imposed on Chinese goods, a move that would hurt China at a time when its economy is struggling to find a firm footing.

At the same time, the US president-elect made the seemingly conciliatory move of inviting Chinese President Xi Jinping to attend his inauguration on Monday. Xi sent Han in his place, a gesture of goodwill given that China was only represented by its ambassador at the previous two US presidential inaugurations.

At their meeting on Sunday, Han told Musk, appointed by Trump to lead a department aimed at creating a more efficient US government, that he "welcomed Tesla and other US companies" to share in the benefits of China's development and contribute to China-US relations.

The vice president's meeting with US businesses was chaired by FedEx CEO, Rajesh Subramaniam, on the US side, and included the heads of eight US firms from a range of industries including technology, banking and logistics, according to an American executive in the room, who added that the meeting overran its allotted time and was very cordial.

"(Han Zheng) is seen as someone, because of his time in Shanghai, who understands the concerns of the foreign business community, he understands the economy," Michael Hart, president of the American Chamber of Commerce in China, told Reuters in Beijing.

"It's a nice fig leaf, or whatever you want to call it, so that's positive."

Xi and Trump were upbeat after speaking by phone on Friday, with Trump calling it "a very good one" and Xi saying he and Trump both hoped for a positive start to US-China relations.

On Monday, China and Hong Kong stocks rose as their phone call eased some geopolitical concerns. The mainland's blue-chip CSI300 Index climbed 0.9 per cent by the lunch break, adding to the 2.1 per cent gain last week. In Hong Kong, the benchmark Hang Seng Index jumped 2.3 per cent, the most in five weeks.

"What I can see is that China's economy is not very good at the moment, due to the impact of the pandemic, and (the fact that) Trump himself is a crazy, wild person (doesn't help matters on our side)," said a Beijinger surnamed Wang, 36.

"The pressure still remains quite big (for us)."