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MNI EXCLUSIVE: China-US Deal Likely By Mid-Year:China Advisors

By Iris Ouyang
     BEIJING (MNI) - A deal between China and the U.S. to resolve their
year-long trade dispute is likely to come by the end of June, although the
timing of a proposed presidential summit to seal an agreement is still unclear,
Chinese trade advisors told MNI.
     "There's around a 70% chance of a deal in the first half of the year, and a
30% chance of a deal in the next three to four weeks," said Wang Haifeng,
director of International Trade and Investment at the Chinese Academy of
Macroeconomic Research, run by the National Development and Reform Commission.
     Media reports have cited sources saying U.S. trade negotiators will resume
talks with Chinese officials next week in Washington.
     "I'm relatively optimistic as economic and trade conflicts do no good to
either side," Wang said, adding that he saw an 85% chance of a deal this year.
"Even if Trump makes a surprising decision due to domestic pressure or other
factors ... the two countries won't decouple as they are so interconnected."
     Yu Miaojie, a veteran trade expert who advises the Ministry of Commerce,
the Ministry of Finance and the State Council's Counsellors' Office, told MNI he
saw an agreement in two to three months.
     "China wants to end the trade war as soon as possible, and the U.S. is even
more anxious," said Yu. "The trade war is increasingly having an impact on U.S.
CPI, while Trump has a very big task to finish trade negotiations with Japan
before year-end when Republicans need to step up preparations for the next
presidential election. Trump has to finish the China-U.S. trade talks to leave
enough time for U.S.-Japan trade negotiations."
     --G20 MEETING?
     The G20 Summit in Japan at the end of June would provide a likely venue for
the U.S. and Chinese presidents to meet and put their seal on an agreement, Tu
Xinquan, a foreign trade expert at the Advisory Committee for Economic and Trade
Policy of the Ministry of Commerce, told MNI.
     "It would be hard to reach a deal in three to four weeks," as Trump said
last Thursday, Tu said, "Because the schedules of the two presidents are hard to
match."
     "It wouldn't be appropriate for China to send President Xi to the U.S. only
to sign a deal, and there are still specific issues the two sides haven't
reached consensus on," he said, adding that a meeting at the G20 would avoid the
risk of embarrassment for Beijing if no agreement were reached.
     All three advisors pointed to other policy measures taken by China to
support its economy even if a trade deal continues to be delayed.
     "The trade talks with the U.S. are not a matter of death or life," Tu said.
"It would be best to sign a deal sooner, but it would not be a big problem if
it's signed later. But for Trump, it's more important than signing a deal with
North Korea."
     U.S. eagerness for an end to the dispute would probably secure an
agreement, he said, despite fears by Chinese officials that Trump could walk
away from a deal when meeting with President Xi.
     The advisors agreed that China will not accept an enforcement mechanism
which bars it from retaliating with tariffs should Beijing fail to meet goals
agreed in a trade deal. Sources have told MNI that the U.S. is pushing for such
a mechanism.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com
--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com
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