MNI POLICY: Trade Spat Could Last Years: China Govt Economist

--China Govt Economist Foresees Trade Friction Last Until 2035

By Iris Ouyang

     BEIJING (MNI) - China-U.S. trade and economic frictions could last for

years, with the two sides not returning to a more cooperative state until 2035,

a Chinese government economist said Wednesday. Over the next two decades, the

dispute would be ongoing although negotiations would continue, Zhang Yansheng, a

senior researcher for the National Development and Reform Commission told a

press briefing at the State Council.

     Here are some highlights from the press briefing:

     -Both countries will will sound each other out over the next few years,

with 2021 through 2025 being the most difficult period as bilateral conflicts in

economy, trade, tech and finance increase. Relations will gradually improve

between 2025 and 2035, Zhang said. 

     -China has doubts over the U.S. sincerity in trade talks as it is creating

an anti-China climate with some of its demands, Zhang told reporters.

     - Zhang indicated the U.S. has demanded China to make sweeping changes in

structural issues and legislation at too steep a pace, something the country

can't do.

     -The U.S. is expected to continue high pressure and even exacerbate it if

China conducts comprehensive adjustment following the U.S. standards and rules,

Zhang said, as under such a scenario China will get stronger.

     -China is prepared for a long-term trade spat with the U.S., the briefing

suggested, and Zhang urged China to remain patient, focus on its own concerns

and interests.

     --Another government-related trade expert indicated shifting U.S. standards

on currency manipulation issues led to China's reluctance to continue talks on

the yuan exchange rate. Beijing was finding it hard to continue talks on the

yuan exchange rate after the U.S. said it needs to change criteria on currency

manipulator. "(The U.S.) have a moving standard, you use whichever fits you, we

are not able to talk, and this is actually the most fundamental (divergence),"

said Li Yong, deputy director of the expert committee at the China Association

of International Trade.

     -Advisors at the briefing still think China views cooperation as the right

option for both sides, adding that China isn't trying to overturn the U.S.'s

lead role globally, but noting Washington remains suspicious.

     -Zhang said China will not increase restrictions on American companies in

China, but look to improve the business environment for foreign investment.

     -The U.S. attempt to reduce reliance on Chinese exports will actually

strengthen the upgrading of industry in China, Zhang said, noting cost-oriented

companies and investment may be transferred out of the country, while higher-end

producers remain.

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

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

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