**MNI Interview: China-U.S. Talks Avert Trade War:Govt Advisor

     **BEIJING (MNI) - A trade war between China and the U.S. may be less likely

now that the two sides have reportedly narrowed differences in "some trade

issues", a government trade advisor told MNI in an exclusive interview.

     The messages conveyed by official channels after the two-day meeting

suggested the two sides are "actively negotiating with each other, while

acknowledging differences," said Liu Yingkui, a director at China Council for

the Promotion of International Trade, an advisory body under the State Council. 

     Liu, who has experience in China's trade talks, commented after China's

Xinhua News Agency summarized the two-day talk in Beijing between top U.S

officials led by Treasury Secretary Steven Mnuchin and a Chinese team under Vice

Premier Liu He. 

     The two sides agreed to build a corresponding "working mechanism" for

advancing talks, a fence-mending move after the previous Comprehensive Economic

Dialogue largely failed. They have reached consensus on some areas after

discussing increasing exports to China, bilateral service trade and investment,

protection of intellectual protection and resolving tariff issues, Xinhua said. 

     The Xinhua statement clearly stated that views on some issues are

"relatively divergent." Highlighting those differences, the Ministry of Commerce

said it lodged a "solemn representation" to the U.S. against its banning of

exporting advanced equipment to Chinese telecommunications company ZTE Corp. 

     --SOLEMN REPRESENTATION

     Two of the main differences may be market access and intellectual property

protection, said Liu Hong, a director with China Association of International

Trade, a think tank of the Ministry of Commerce, told MNI. China is slowly

opening up based on its own economic development and but won't match the pace

demanded by the U.S., he said.

     China will stick to its principles -- advancing its "Made in China 2025"

initiative and reduce its trade surplus only on market-based rules, other

government advisors told MNI in previous interviews. 

     While progresses have been made, Xinhua's tone was modest and avoided

sounding too optimistic, said Pei Jiansuo, an associate professor at University

of International Business and Economics in Beijing, who worked for the Ministry

of Commerce for some time. 

     Still, "it shows that the two sides are seeking to resolve the issues," Pei

said.

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

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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