They both agreed to disagree in a bitter war of words in Beijing. Mike Pompeo, the United States Secretary of State, faced a fraught meeting with Foreign Minister Wang Yi on Monday.

Highlighting the schism between Beijing and Washington, Wang accused the US of descending into “conflict and confrontation.”

“These actions have affected the mutual trust between both sides, and has cast a shadow over the prospect of China-US relations, which completely go against the interest of our two peoples,” Wang said at a media conference.

“We require that the US stop such misguided actions,” he pointed out, adding that the two countries should pursue cooperation “and not descend into conflict and confrontation.”

Wang and Pompeo discussed a range of issues, such as North Korea and the trade war. But after US Vice-President Mike Pence delivered a searing speech last week when he accused China of military and economic aggression, it was always going to be a minefield.

Pompeo even invoked the cancellation of a meeting between US Defense Secretary Jim Mattis and his Chinese counterpart, which was supposed to take place in Beijing this month.

“I regret that the strategic dialogue between our two countries is something you all chose not to undertake,” he said.

But Wang retorted: “The strategic dialogue was not called off by the Chinese. I am stating a fact.”

Still, this verbal spat could not have come at a worse time. Beijing is becoming increasingly concerned about an economic slowdown. On Monday, a private services sector purchasing managers’ index showed expansion last month, despite firms shedding jobs.

The Caixin/Markit PMI jumped to 53.1 in September from 51.5 the previous month and stayed above the 50 mark, which separates growth from contraction.

“[But] what we should be wary of is that overall employment contracted in September,” Zhengsheng Zhong, the director of macroeconomic analysis at CEBM Group, said in a note.

At the weekend, the People’s Bank of China effectively decided to pump up to US$175 billion into the economy when it reduced the reserve requirement ratios, or RRR, for commercial banks.

“[The] RRR is currently 15.5% for large commercial lenders and 13.5% for smaller banks [and it] would be cut by 100 basis points effective October 15,” the PBOC, or de facto central bank, announced in a statement.

Apart from disappointing employment data from the services PMI, factory activity sentiment also deteriorated last month, buffeted by the trade war.

During the summer, the world’s second-largest economy has shown signs of cooling with manufacturing profits slowing for four consecutive months. Mainland markets have also fallen to levels not seen in the past four years. All this has come at a time when business confidence in China has dipped.

“The trade war’s impact on the economy is showing,” Xu Hongcai, the deputy chief economist at the China Center for International Economic Exchanges, a Beijing think tank, said.

“There is room for further reductions and I expect another one percentage point cut by the year-end,” Xu added.

The move to help struggling companies facing funding problems was rolled out on Sunday, which came at the end of the Golden Week national holiday, and just 48 hours after Pence had increased the pressure on Beijing.

Up to $260 billion worth of Chinese imports to the US have been hit by tariffs and President Donald Trump has hinted he “could go all the way to 500,” which would include all goods and products going into the country.

“America had hoped that economic liberalization would bring China into greater partnership with us and with the world,” Pence said in his speech at the Hudson Institute in Washington. “Instead, China has chosen economic aggression, which has, in turn, emboldened its growing military.”