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     **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. 
     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
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
--MNI Beijing Bureau; +86 10 8532 5998; email:
[TOPICS: MAQDS$,M$A$$$,M$Q$$$,MC$$$$,MI$$$$,MT$$$$,MX$$$$,MGQ$$$]

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