MNI EXCLUSIVE: China Won't Cede On Key Trade Issues: Advisors

By Wanxia Lin

     BEIJING (MNI) - China will not fully acquiesce to key U.S. trade demands in

areas such as intellectual property rights protection, making a comprehensive

settlement to the two nations' dispute unlikely despite an interim agreement

expected in the near future, government advisors told MNI.

     "China and the U.S. will not be able to compromise when it comes to

substantial issues," said Shi Yinhong, a professor at the School of

International Studies, Renmin University of China, adding that the best prospect

for the removal of tariffs imposed during the dispute would come if there were a

threat of a recession before the 2020 U.S. presidential election, prompting

Washington to make concessions.

     China's Ministry of Commerce says that an agreement in principle had been

reached on a so-called "phase one" deal with the U.S. But more detailed

subsequent talks will run into trouble as China will not fully agree to U.S.

demands regarding intellectual property rights, forced technology transfer,

subsidies of state-owned enterprises or its Made in China 2025 plan to boost

production of high-technology goods, Shi said.

     --AGRICULTURAL GOODS

     The advisor also cast doubt on claims by U.S. President Donald Trump that

China could buy up to $40 billion to $50 billion of American agricultural

products a year, noting that the peak for Chinese imports of U.S. farm goods was

$29 billion in 2013.

     "China does not have this huge market demand for doubling imports," Shi

said, adding that even the ravages of African Swine Fever, which has devasted

China's pig herds, boosting demand for imported pork, would not be sufficient to

push purchases that high.

     Success in second-round talks will require the U.S. to remove all tariffs

imposed since the dispute began in 2018, said Huo Jianguo, a former head of the

Chinese Academy of International Trade and Economic Cooperation, which is

affiliated with the Ministry of Commerce. In the meantime, the phase one deal is

very likely soon, Huo told MNI on Sunday.

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

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

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