Bejing and Washington need to resume strategic communications, a senior Chinese government advisor said Thursday, noting relations were "very unsatisfactory" and that the coronavirus had hit the implementation of their trade deal.

US-China tensions have been rising this year since the signing of a partial trade deal in January, with officials swapping barbs over the origin of the pandemic -- which first surfaced in central China and has since ravaged the global economy.

Although both countries have committed to fulfilling the agreement's terms, analysts have flagged increasing uncertainty, a recent decline in Chinese purchases of US soybeans, and a drop in US imports in the first few months of this year.

Zhu Guangyao, a State Council counsellor, told a press briefing that "objectively speaking, the epidemic has an impact on the implementation of this deal".

"But even under such circumstances, China has been emphasising that both sides should work together," added Zhu, who is also a former vice finance minister.

Under the deal, Beijing agreed to import an additional $200 billion in US products over two years, although economists question if this will happen with business activity hammered by the virus.

Officials said last month that "good progress" was being made on creating the conditions needed to make the agreement a success.

Zhu said he expects the second stage of trade negotiations to touch on structural issues, stressing that the close connection between both economies comes from decades of hard work, and "decoupling will not happen just because some people say it will".

But he acknowledged that the current status of the US-China relationship was "very unsatisfactory because channels of communication have been in a standstill".

He said China and the US should maintain "timely communication" on key issues, adding that both sides "should resume strategic communication at various levels including in politics, diplomacy and the economy."

State Council counsellors remain bullish over China's economic recovery.

Liu Huan, also former deputy director of the Central University of Finance and Economics' school of taxation, said Thursday he expects a bounce-back in the second quarter and for consumption to spike in the third if the epidemic situation stabilises.

China logged a historic GDP contraction in the first three months.

Liu said he believes China "does not rule out the possibility of a larger fiscal deficit or stimulus", but this depends on the effectiveness of existing monetary policy.

He said ensuring employment was the priority, and China was unlikely to engage in "irresponsible quantitative easing".

Australia won't be 'intimidated' by China economic threats: PM
Sydney (AFP) June 11, 2020 - Australia warned Thursday it would not be intimidated by attempts at economic "coercion" after China threatened to undermine the multi-billion dollar flow of Chinese tourists and students to the country.

Beijing has issued warnings in recent days that Chinese should avoid Australia due to concerns about racist incidents targeting ethnic Asians during the coronavirus pandemic.

The comments were the latest salvo in a long-brewing diplomatic dispute between Australia and its largest trading partner.

Prime Minister Scott Morrison dismissed on Thursday allegations of racist treatment of Chinese as "rubbish".

"It's a ridiculous assertion and it's rejected," he said during a radio interview.

"We have an important trading relationship with China and I'd like to see that continue," Morrison said.

But he warned his government would "never be intimidated by threats" or "trade our values in response to coercion from wherever it comes".

During the pandemic racism toward Asians has reportedly increased, according to the New South Wales anti-discrimination commission.

Beijing defended its travel advice at a briefing on Thursday, saying it was "based on a large volume of facts".

"I don't know where the Australian leader's so-called "coercion" comes from," foreign ministry spokeswoman Hua Chunying told reporters.

"We advise Australia to face up to the problem, reflect on itself, and take concrete measures to protect the safety and rights of Chinese nationals in Australia," she said.

Tensions have grown steadily in recent years between the two governments as Australia has moved to counter Chinese moves to build its influence both domestically and across the Pacific region.

More recently Canberra angered Beijing by leading calls for an international probe into the origin and handling of the coronavirus pandemic in central China.

China has since taken several steps targeting trade with Australia, including the attempts to discourage Chinese travellers, who represent the biggest groups of foreign tourists, and overseas students.

The effect of Beijing's travel advice will only be known once Australia's borders -- closed to all non-essential inbound and outbound travellers due to the pandemic -- reopen.

Education is Australia's fourth-largest export with more than 500,000 international students enrolled last year, bringing about Aus$37 billion into the economy.

After Canberra's support for a virus inquiry, China's ambassador in Canberra threatened a widespread consumer boycott of Australian products -- a warning followed up by a bar on four major Australian beef exporters.

That was followed in May by an 80-percent tariff on Australian barley over dumping allegations, a move grain growers say will cost at least Aus$500 million (US$350 million) a year.

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