China accuses US of 'naked economic terrorism' in trade dispute – business live

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Some economists are uneasy with describing an economic dispute as a “trade war”. But when senior diplomats – usually so, well, diplomatic – start throwing around terms like “terrorism”, investors generally take note.

Provoking trade disputes is “naked economic terrorism”, a senior Chinese diplomat said on Thursday, in a clear escalation of rhetoric which signals that there is likely a long way to go for investors awaiting an easing of tensions.

When asked about the trade war with the United States in Beijing, Chinese vice foreign minister Zhang Hanhui gave a clear message on the country’s willingness to fight back. According to Reuters, he said:

We oppose a trade war but are not afraid of a trade war. This kind of deliberately provoking trade disputes is naked economic terrorism, economic chauvinism, economic bullying.

Concerns over trade have weighed on markets so far this week, provoking steep stock market falls yesterday after rare earth minerals appeared likely to become the latest front in the dispute. With two more trading days left in May, the S&P 500 is heading for a loss of 5.5% – its first monthly loss since December.

Asian markets were for the most part in negative territory (with the exception of South Korea’s Kospi 200 index, which gained 1%) on Thursday. Japan’s Topix and Nikkei 225 indices fell by 0.3%, while the CSI 300 index, which tracks the biggest companies traded in Shanghai and Shenzhen, fell by 0.8% at the time of writing.

In corporate news, British transport company Firstgroup is planning to sell off its Greyhound bus operator in the US as well as reviewing options for its UK bus arm. Future commitments to the British rail industry will also be dependent on the government’s attitude, it said, amid pressure from investors to ditch UK trains altogether.

And Watches of Switzerland, which sells what it says on the tin, priced an initial public offering at 270p. That would value Britain’s biggest watch-vendor at about £647m, while raising £220m.