MNI INTERVIEW: China May Request Trade Delay: Ex Vice Minister

     BEIJING(MNI) - China is likely to ask the U.S. to accept delays in promised

purchases of American goods under the Phase One trade deal signed last month, as

it copes with the economically disruptive coronavirus outbreak, a former vice

minister of commerce, Wei Jianguo, told MNI.

     "China has a huge market, it's just that consumption is temporarily

suppressed by the epidemic," said Wei, who describes himself as optimistic about

China's capability of fulfilling its commitment to increase U.S. imports by $200

billion from 2017 levels through 2022. Economic growth should pick up later in

the year and still hit 6%, even if the virus shaves as much as a percentage

point off first quarter growth, he said in an interview. This would be in line

with what has widely been expected to be the government's growth target.

     "Despite the difficulties, we will try hard to meet our commitments," said

Wei, noting that "delaying" does not mean "cancelling" and adding that he

expected the U.S. to understand China's situation and to be flexible over

adjusting the timetable for the expansion of trade.

     Future negotiations between the two countries will proceed amid the tone of

"coordination, cooperation, stability" achieved by the two nations' heads of

state in the G20 summit in Osaka last year, said Wei, who served as vice

commerce minister from 2001-2008. He called comments by U.S. Commerce Secretary

Wilbur Ross, who said the coronavirus could bring jobs back to the U.S.,

"irresponsible."

     "It's just common sense that the epidemic will only last for a period of

time, while moving supply chains can't happen overnight," said Wei, now vice

chairman of the China Center for International Economic Exchanges.

     --"EXPLOSIVE COMEBACK" FOR CONSUMPTION

     The interview with Wei took place after President Donald Trump's economic

advisor Larry Kudlow said on Tuesday that the viral outbreak would delay

hoped-for increases in U.S. exports agreed under Phase One. But the U.S. advisor

added that Washington anticipates only a "minimal impact" on its economy from

the disease.

     A U.S. government official told MNI Feb. 3 that the U.S. Trade

Representative's office had not received any request from China to discuss

changes in purchase commitments due to coronavirus.

     Only a limited number of provinces and industries -- including tourism,

transportation, catering and accommodation - have been severely affected by the

epidemic, said Wei, adding that e-commerce is "doing fine", and that first

quarter GDP growth should hold above 5%.

     "Consumption will make an explosive comeback after the outbreak ends,

making up for the loss in Q1," he predicted, although he noted that measures to

stimulate consumption would still be necessary after the epidemic.

     Work on infrastructure projects, and at factories producing goods for

exports, should resume soon, Wei said. As the year goes on, exports will be

bolstered by recovering overseas demand, while the government's push for more

spending on investment projects should also fuel the economy, he said.

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

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