MNI INTERVIEW: China Will Negotiate, If U.S. Compromises

By Iris Ouyang

     BEIJING (MNI) - China would be willing to negotiate with the U.S. over

specific demands such as increasing American exports to the country, but

agreement will not be possible unless Washington is prepared to compromise, a

senior researcher linked to the Ministry of Commerce told MNI.

     "The U.S. should express clearly whether it wants to negotiate," said Li

Wei, lead researcher on the Americas at the ministry's Chinese Academy of

International Trade and Economic Cooperation and formerly with Beijing's mission

in Washington D.C.

     "We also need to see something we can get (from possible talks)," Li noted

in an interview late on Tuesday.

     China is unlikely to retaliate against U.S. tariffs by restricting U.S.

companies' investment in China, as that would go against Beijing's current

policies of reform and economic opening. "It's not practical either to resort to

measures using foreign exchange tools or selling off U.S. treasuries," Li said,

adding that further economic reform measures could be announced at the fourth

session of the 19th Party Congress in coming weeks.

     --CHINA NARROWING ECONOMIC GAP

     The two sides should seek agreements on specific items, if not on all

disputed trade-related areas, to restore confidence to investors, Li said.

     "Any measure trying to reduce tensions in bilateral economic and

comprehensive relations, or a gesture indicating a more positive direction would

benefit both sides," Li said, although he noted that the increasing competition

between the two countries in different sectors as China narrows the economic gap

with the U.S. is a complicating factor in resolving the dispute.

     "As the bilateral relations are asymmetrical and China's reliance on the

U.S. is higher than the other way around, such trade conflicts may continue for

a few years even if (President Donald) Trump steps down or a new president is

elected," said Li.

     Li dismissed speculation that China is withholding talks until after the

U.S. midterm elections in November. Technical teams from the two countries

should continue communication no matter the political background, said Li,

echoing comments from China's Ministry of Foreign Affairs on Tuesday, which said

communication and dialogue with the U.S. had been maintained at all levels.

--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

--MNI London Bureau; +44208-865-3829; email: Jason.Webb@marketnews.com

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