MNI INTERVIEW: PBOC Advisor-Trump Trade War Aims To Curb China

--China Needs To Continue Opening Up: Fan Gang

--China Should More Invest In OBOR, Less In US Treasuries: Fan

--Capital Account Open Up Could Accelerate While Clean Up Debts

     BEIJING (MNI) - The escalating attacks on China over its trade practices

announced by the Donald Trump administration may be motivated by an attempt to

suppress China's rise, particularly to curb its hi-tech development ambitions,

Fan Gang, a member of PBOC's monetary policy committee, told MNI in an

interview.

     "We should not simply see this a trade problem; it isn't just about dealing

with the two nations' trade deficit," Fan said on the sidelines of the Boao

forum in Hainan on Monday. 

     The Trump administration's latest list of planned tariffs on more than

1,300 product categories focuses on China's industrial machinery and technology

exports. It took on alleged infringements of intellectual property by China,

targeting high-tech sectors that Beijing sees as the future of its economy

branded Made in China 2025 by Chairman Xi Jinping. 

     China needs to keep "disturbances" from derailing its development and

focusing on keeping its growth sustainable, Fan said. "No matter it would turn

into a trade war or not, the priority for China is not dealing with short-term

conflicts, but long-term development."

     He stressed that China will further open up as it increases the capacity of

addressing its own risks, adding that the opening of the capital account may

accelerate as the debt mess gets cleaned up.

     He also suggested that China could make better use of its capital

accumulated in the past 40 years, supporting infrastructure building along the

One Belt, One Road Initiative, rather than investing in the U.S treasuries.

     China needs to treat the inevitable challenge by the U.S. over its rise

rationally based on a "long-term and basic interests," Fan said.

     The trade war will impact the entire manufacturing system in Asia since

China's supply-chain spans extensively over the continent. 

     "Sino-US trade conflicts risk destabilizing the whole of Asia, because

Asian countries are entwined in the production chain of the two biggest

economies," Fan said.

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

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

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

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