MNI EXCLUSIVE: Extension Over Concessions For China: Advisors

By Iris Ouyang

     BEIJING (MNI) - China may prefer to extend trade talks with the U.S rather

than offer too many concessions to Washington's demands, as conceding ground

could be worse than any additional tariffs, advisors to the government have told

MNI.

     "For China, the worst case is not that (U.S. President) Trump slaps on

tariffs, but in making too many concessions because of concerns over them," said

Yu Miaojie, a veteran trade expert who advises Chinese government departments.

     Yu's comments came as China appears to be taking a tougher stance against

increasing demands from the U.S. administration now accusing China of reneging

on previous commitments.

     Others agreed that China could not lower its status in talks. "If they want

us to be subordinate, we can't do that, because the U.S. will again and again

demand more if we did so," Liu Hong, a director of the Ministry of Commerce's

China Association of International Trade told MNI.

     --NO SURPRISE

     A turn in the recent optimistic dynamics of the talks has not come as a

surprise to many China government advisors who told MNI that they have long

predicted such an outcome and the Beijing has backup plans for such situation.

     Their viewpoints echo Beijing's official response, with the Ministry of

Commerce stressing China can counter any outcome from the trade talks, while

restating there will be retaliatory measures if the U.S. increase tariffs on

some Chinese goods Friday.

     According to advisors, China could increase its retaliatory tariffs on $60

billion American goods to 25% from the current 10%, whilst also cancelling

promises to the U.S. for increased purchases, lowering car tariffs and further

opening up of the service sector.

     --DEADLINE

     The U.S. plan to implement the new tariffs at 0401GMT Friday, despite

China's senior trade delegate Vice Premier Liu He being in Washington for talks,

leaving little time for advances. But advisors tend to view President Trump as

less likely to proceed with the plan although they also recognize there is some

chances.

     Yu said the chance for the 25% tariff hike to take effect on Friday is

relatively low, as normal procedure would require the Trump administration to

seek approval from Congress before full implementation.

     "I don't mean they won't implement it at all, they may do that in half a

month or a month after going through the procedures," Yu told MNI.

     But even if Trump did push through an increase, China shouldn't immediately

make too many compromises, as Congress could reverse the move in the next few

weeks, Yu said.

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

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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