As tension between the incoming Trump administration and China intensifies, China has announced that it won't be backing down should this erupt into a full-blown trade war. This came after Trump targeted China in his recent tweets and the names included in the nominees for trade officials.
"There are flowers around the gate of China's Ministry of Commerce, but there are also big sticks hidden inside the door - both await Americans," said an editorial.
The article came after Trump selected Robert Lighthizer, who was a former trade official of the Ronald Raegan administration. Lighthizer has criticized China's trade practices as U.S. trade representative.
Trump also named Peter Navarro, a University of California Irvine economics professor, to head a newly formed White House National Trade Council. Meanwhile, billionaire Wilbur Ross was nominated for commerce secretary.
Chinese media stated that Trump's choices for trade officials will form an "iron curtain" of protectionism in his economic and trade team.
If the Trump administration does instigate a trade war, China will be using its arsenal of measures to retaliate if diplomatic talks between the two don't turn out favorable.
"The far more potent weapon that the Chinese have is to use either overt or covert measures to restrict the access of American companies to the Chinese market, which is still a pretty fast growing market," said Cornell University economist Eswar Prasad.
Sources said that these measures include subjecting U.S. companies or ones with large Chinese operations to tax or anti-trust probes. Another possible measure is anti-dumping investigations and scaling back government purchases of American products.
"This could quickly backfire on Mr. Trump and the U.S. economy," he said.
While China hopes to solve this ongoing verbal war with Trump through diplomatic relations, it won't be backing down if this escalates into a full-blown trade war between two of the biggest economic powers in the world.