MNI EXCLUSIVE: China Advisors Say No More Concessions To U.S.

By Archie Zhang

     BEIJING (MNI) - China has no more concessions to offer the U.S. to secure a

potential interim "phase one" deal to wind down the two countries' 16-month

tit-for-tat trade war, government advisors told MNI.

     "I think China has offered what it can offer in the latest 13th round of

negotiations," said Lv Xiang, a researcher from the Chinese Academy of Social

Science which is overseen by the State Council.

     "China is waiting for Trump to make his decision," he said, adding that

previous Chinese offers of promises to buy U.S. agricultural products would be

conditional on measures taken by the U.S.

     China insists that removing tariffs imposed during the trade war would be

key to any deal, but President Donald Trump threatened on Tuesday to increase

them should the two countries fail to reach agreement. Trump has also previously

said he has not agreed to remove the tariffs, despite what China's Ministry of

Commerce said on Nov. 7 was an agreement in principle between the two countries

to do so.

     While Lv considers a deal still to be possible, despite the competing

claims on Trump's attention by moves to impeach him, he noted that the U.S.

leader's changes of position mean that he has not made a final decision and that

officials around him already realise that China will not give more.

     --HONG KONG

     Tu Xinquan, dean of the China Institute for WTO Studies, agreed: "China has

done what it can do now."

     "I think China still wants to solve this in the next two months before the

U.S. election primaries," Tu said, "So far as I understand, the current

negotiation is about the extent to which tariffs should be removed."

     The two countries published a statement on Saturday stating that they had

conducted a "constructive talk" on trade without mentioning progress, casting

doubt over the prospects for the much-anticipated "phase one" deal.

     "There is no reason to be optimistic in the current situation," said Shi

Yinhong, a professor at Renmin University, "Trump wants China to double

agriculture purchases. But this is nonsense."

     The U.S. Senate on Tuesday unanimously passed the "Hong Kong Human Rights

and Democracy Act", showing support for months-long protests in the territory

which China regards as political unrest. In response China's Foreign Ministry on

Wednesday summoned U.S. ambassador to lodge a "solemn representation" on the

matter.

     The Act will now be sent to the House of Representatives, which approved

its own version last month. The two chambers will work out the differences and

submit the result to Trump for considerations.

     "If Trump signs the legislation, it will be really bad for the trade

negotiation," Shi told MNI.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: archie.zhang@marketnews.com

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

[TOPICS: M$A$$$,M$Q$$$,MC$$$$,MT$$$$,MX$$$$,MGQ$$$]