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MNI EXCLUSIVE: China Not Seeking Phase 1 Deal Easing: Advisors

China May Up Purchases of Agricultural Products To Boost Overall Quotas

(MNI) LONDON

China is unlikely to try renegotiating aspects of the 'phase one' trade deal with the U.S. when officials from the two countries meet later this month, as Beijing accepts President Donald Trump will dismiss any such requests under the current strained relations between the two countries, government sources and policy advisors told MNI.

"China is unlikely to propose re-negotiating the purchase figures in the deal as it knows Trump won't agree," said Shi Yinhong, a U.S.-China relationship expert at Renmin University and an advisor to the current cabinet, pointing to the fact that the U.S. President needed a strong deal to boost his reelection credentials.

The meeting planned for Aug 15 will see China's top trade negotiator Liu He and U.S. counterpart Robert Lighthizer assess China's compliance with the phase one deal. In agreement with Shi, one former trade official told MNI that the U.S. is obviously unsatisfied with the deal to date as China failed to meet the targets.

THIS DEAL OR NO DEAL

"There is no such option for China to change the numbers. The only two choices are to keep the deal or throw it away," the former trade official added.

According to Shi, Washington is aware that China can't hit all its goals and the Administration will look to force China to maximize its imports from the U.S. He believes Chins can increase purchases in some areas, particularly agricultural products. "Grains, cotton, and soybeans are what China needs," Shi said

Both parties will look to smooth issues and talk of "creating a good environment", according to Lv Xiang, a U.S. expert at the Chinese Academy of Social Sciences, with this modest easing of the tension a key as to whether China will continue to fulfill the deal.

According to the former trade ministry official, some in China feel the U.S. have thrown their weight around in recent months and Washington should offer some gesture for Beijing to continue the deal.

LIMITED IMPACT

Shi and Lv were both unsure how much influence Lighthizer will have in the White House at present, as anti-China security hawks seem to have taken the lead over trade in the wake of the Covid-19 outbreak, as seen with the moves against Chinese-owned social media platform TikTok.

"Taking on China's tech firms is in line with the current mood in the U.S.," Shi said noting how security and anti-China sentiment had relegated economic disputes down the list of concerns.

MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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