MNI SOURCES: China Proposes Trade Deal Phase-In

--China President Of N Korea Talks Precedent

By Iris Ouyang

     BEIJING (MNI) - China is proposing phasing in enhanced intellectual

property protection and measures against forced technology transfer over six

years in trade talks with the U.S., but Beijing is holding out against meeting

all of Washington's demands for structural reform to its economy, a source with

knowledge of the issue told MNI.

     While China has made "some concessions" on structural reform, talks on a

mechanism to enforce any agreement are also ongoing, the source said on Friday.

     A Florida summit between presidents Xi Jinping and Donald Trump to seal a

deal could be delayed into April or later, the source said, noting that the

Chinese were concerned the U.S. leader might make last-minute changes of the

sort that led to the break-up of his recent meeting with North Korea's Kim

Jong-un.

     The most likely initial outcome from talks would be the removal by the U.S.

of 10% tariffs on Chinese goods worth $200 billion, while an additional 25%

tariff on a further $50 billion of Chinese products would only be lifted when

China delivers on its commitments, the source said.

     U.S. Treasury Secretary Steve Mnuchin had said a meeting could come as

early as the end of March.

     Both Democrats and Republicans are pressing the U.S. administration not to

     sign a deal without promises by China to make structural changes ranging

from reforms to state-owned enterprises, cuts in subsidies and an end to what

Washington calls forced technology transfers.

     The source's comments came as U.S. Ambassador to China Terry Branstad said

     the two sides haven't set a date for the summit as the "vast majority of

issues" need to be resolved, the Wall Street Journal reported Friday.

--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

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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