Xi raises 'negative factors' in call with Trump

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Moves such as levying tariffs or boosting ties with Taiwan could prompt retaliation from China, especially as Xi prepares for a key Communist Party party reshuffle.

The move prompted China to deploy military vessels and fighter jets, foreign ministry spokesman Lu Kang said in a statement late Sunday, calling the U.S. operation a "serious political and military provocation". The bank of Dandong was the secret passage that North Korea used for foreign currency dealings, and having it placed under sanction will be a significant blow to North Korea.

Thus, in late June the White House approved the sale of more than $1 billion in arms to Taipei.

Beijing has lodged protests following Washington's announcement of the Trump administration's first arms sales to Taiwan.

The Chinese bank recently placed under US sanctions was only one of the 10 Chinese companies on the U.S.'s blacklist, and for the moment the sanctions will be limited in order to gauge China's reaction.

The phone call came hours after the "freedom of navigation" operation in the South China Sea, an operation meant to assert the right to sail in disputed waters.

China's defense ministry issued a similar statement Monday, saying it would beef up patrols and take precautions commensurate with the threat level to safeguard "national sovereignty and security".

While there was no mention of the warship in the White House statement, it said that the two leaders discussed "a range of other regional and bilateral issues of mutual interest" and indicated the two would meet at the Group of 20 summit in Germany this week.

"The economic prosperity of China, of south-east Asia, is inextricably linked to peace in that area and the greatest risk to peace in that area is North Korea", Joyce said.

Trump also talked to Japanese Prime Minister Shinzo Abe by phone. They highlighted "their unity with respect to increasing pressure on the regime to change its risky path", the administration said.

The USS Strethem has been accused of'aggression
GETTYThe USS Strethem Trump in hot water over US advances towards disputed island

"The trade sanctions would pale into insignificance against what would happen if North Korea continues down this path because, if North Korea was to make a mistake in one of their launches, that's all they have to do, they don't even have to deliver a weapon", he said.

"The media reported that President Trump had allegedly demanded unofficially all-out sanctions against North Korea from Beijing; I do not know whether that's true, but if it's true, [Trump] has made a mistake", Mozias told RIA Novosti.

According to the White House, Trump told Xi over the phone last Sunday that the threat from North Korea's nuclear weapons and ballistic missiles is growing.

The ministry said Trump told Xi the US government would continue to follow a "one China" policy, under which Washington acknowledges the Chinese position that there is only one China and Taiwan is part of it, and that this position had not changed.

China hopes that the US will handle the Taiwan issue appropriately in accordance with the "One China" principle and the three China-US joint communiques, Xi said.

"Although Washington has many times reaffirmed that it subscribes to the one-China policy, it should take actions that honor its words, rather than eating its words", Ruan said.

Cheng Xiaohe, an associate professor of global relations at Renmin University in Beijing, said that given the recent actions by Trump, it was "a little bit odd" that Xi had agreed to the phone call.

Hanson said it's fortunate that Trump is commander-in-chief because he brings a "credible threat of violence" to the diplomacy.

"The actions the administration has taken have upset the Chinese, no doubt about it", Mr Cheng said.

There were two reasons for Trump's change of policy: Warmbier's death, and the unsatisfactory outcomes from the Diplomatic and Security Dialogue held between the USA and China on 21 June.

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