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Repeats Story Initially Transmitted at 09:30 GMT Aug 14/05:30 EST Aug 14
--Say Trade Issues Not Linked To Resolution Of Korean Crisis
By Vince Morkri
     BEIJING (MNI) - China on Monday refused to say whether it would retaliate
if the United States initiates trade sanctions against it for what Washington
claims is widespread infringement of intellectual property rights, stressing
only that the two sides had reached an agreement on trade during their
Comprehensive Economic Dialogue in Washington last month and that China hoped to
resolve any issues through talks.
     "The two sides have reached consensus on China-U.S. trade economic
cooperation," Foreign Ministry spokeswoman Hua Chunying said at the regular
Ministry of Foreign Affairs press briefing. "A trade war between the two
countries has no future. The only result between the two countries would be
'lose-lose.'"
     Hua also said there was no linkage between the U.S.-China trade issue and
the resolution of the crisis on the Korean Peninsula.
     "The China-U.S. trade issue is totally different, and it's not appropriate
to use one as a tool to keep pressure on the other issue," she said, adding that
China had made "relentless efforts for the resumption of dialogue" between the
United States and North Korea.
     During a phone call on Friday, President Xi Jinping and U.S. President
Donald Trump had an "in-depth exchange of views" on trade and on North Korea,
agreeing that all parties involved in the latter issue should stay directed
toward a political settlement, Hua said.  
     "Trump has an understanding of China's role in relation to the Korean
Peninsula," she said, reiterating that China would maintain neutrality if North
Korea were to launch a first strike against the United States.
     According to the White House, Trump asked Xi during their phone
conversation to do more to rein in North Korea's nuclear ambitions. The request
came after Trump vowed to rain "fire and fury" on North Korea after Pyongyang
threatened to lob missiles near Guam, a U.S. territory.
     Trump also said last week that if China helped the U.S. to pressure North
Korea, "I feel a lot differently toward trade." 
     The White House issued a statement saying that Trump and Xi had agreed that
North Korea "must stop its provocative and escalatory behavior," and reiterated
Washington's and Beijing's commitment to denuclearizing the Korean Peninsula. 
     The White House said over the weekend it planned to announce on Monday an
investigation into what U.S. officials describe as rampant intellectual property
rights theft by China, as well as online and physical piracy. 
     In an editorial on Monday, China's state-run Global Times harshly
criticized the plan. Trump, it said, "stubbornly believes that the U.S. has
suffered losses from the current international trade system while China has
gained an advantage." 
     "Trump cannot use Section 301 at will as a lever against China, another
trade giant," it said, referring to the section of the U.S. Trade Act of 1974
under which the administration would conduct the investigation. "The Trump
administration should have second thoughts about putting pressure on China on
trade and avoid a full-blown trade war," it said, adding that if China were to
sue under World Trade Organization rules should Trump launch an investigation
into China's trade practices, "it is highly likely that China would win.
     It also called the linkage of the China-U.S. trade issue with the Korean
nuclear issue "illogical," but said the two sides would "continue to maintain
their complex bilateral relations."
     The Wall Street Journal on Monday reported that the Pentagon's top military
officer, General Joe Dunford, the chairman of the Joint Chiefs of Staff, said
the U.S. military had an array of military options to use in case of any action
by North Korea, but that the focus remains on finding a diplomatic solution to
the problem. 
     General Dunford had planned to arrive in Beijing on Monday, presumably for
talks with Chinese government officials. 
     Tensions showed signs of easing on Monday and Asian markets were mostly up
on the lack of saber-rattling.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com
--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com