MNI INTERVIEW: No Sino/US Trade Deal Imminent: Govt Researcher

--Unlikely Negotiators Will Reach Agreement in Beijing in Coming Days

     BEIJING (MNI) - It is unlikely a trade deal will be struck by China and the

U.S. in coming days when officials from Washington are scheduled to visit

Beijing for negotiations, a veteran researcher at a government-managed think

tank told MNI in an exclusive interview. 

     "I'm cautious (that an agreement will be reached) and I'm not blindly

optimistic," Mei Xinyu, a researcher at the Chinese Academy of International

Trade and Economic Cooperation under China's Ministry of Commerce, told MNI

Thursday. 

     According to Mei, it's doubtful that the two countries can reach consensus

within a single visit. 

     The former official at the People's Bank of China, a trade expert whose

articles are often published by the People's Daily, the official Communist Party

newspaper, representing the government's voices on trade, noted China will be

"sober" about any outcome from the negotiations.

     Mei's comments contrast with those of U.S. President Donald Trump, who said

he was optimistic the world's two largest economies would reach a trade

agreement. Trump on Tuesday announced that U.S. officials, including Treasury

Secretary Steven Mnuchin, will talk with the Chinese government in Beijing in a

few days.

     The specific time for the trade talks have not been confirmed with final

details still to be finalized, but it's likely to be scheduled after May 1.

     The Trump administration has made efforts to escalate the trade conflict

and it is unlikely it will stop just a little more than one month after the

escalation, said Mei, adding he expects the trade row may continue for some

time.

--TIT-FOR-TAT

     In early March, the U.S. slapped stiff tariffs on imports of Chinese

aluminum and steel. The Trump administration has threatened to impose additional

duties on up to $150 billion Chinese products. 

     China retaliated with increased levies on $3 billion worth U.S. goods and

on U.S. pork and fruits, later threatened with more plans to increase tariffs on

American vehicles, aircrafts, chemicals, and agricultural products such as

soybean. The tit-for-tat actions of the two nations have raised concerns

globally about a trade war between the world's two largest economies.

     "But the U.S. will not get what it wants," Mei said, referring to the $100

billion cut in the trade deficit President Trump demanded of China. "The U.S. is

trying to price itself out of the market."

     While the U.S. investigations into Chinese tech companies were efforts to

increase leverage before officials' visit to China, it's not at all helpful to

the smooth negotiations between the two sides, Mei said.

--NATIONAL SECURITY

     Earlier this month, the Trump administration banned American firms from

selling components such as semiconductors to China's tech company ZTE, and ZTE

shares have been suspended from trading. The U.S. government is also

investigating on national security grounds Chinese tech giant Huawei

Technologies Co Ltd, the third largest mobile phone producer in the world after

Apple and Samsung.

     "China will stick to its principles," Mei stressed, especially the

country's "Made In China 2025" initiative which aims to develop high-end

technology and manufacturing.

     China has already made preparations for all possible outcomes: if the

negotiations end with an agreement, or if they do not. "The U.S. should not

think China is so eager to strike a deal in one time that they can increase

threats on China," Mei said. "If that's the case, the U.S. should stop that

mindset."

     Any negotiations should be based on World Trade Organization principles and

multilateral rules, Mei said. If the U.S. wants to discuss trade issues based on

its domestic laws, "the U.S. can, but it should withdraw from the WTO first,"

Mei stressed.

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

--MNI Singapore Bureau; +65 8233 2326; email: Asia-Editor@marketnews.com

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

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