REPEAT: MNI: China Trade Advisor Sees Retaliatory Stance

Repeats Story Initially Transmitted at 05:10 GMT Apr 12/01:10 EST Apr 12

--China Will Not Be Proactive In Trade Dispute, Will React Accordingly

     BEIJING (MNI) - China's stance in the trade dispute with the U.S. is not

antagonistic, but it sometimes has to act unreasonably to counteract the U.S.

when it turns unreasonable, a trade expert at an advisory group directly managed

by the Chinese government said in an exclusive interview with MNI.

     "China will increase measures if the U.S. do so, but China will not

proactively create confrontation," Wang Haifeng, director of the international

trade and investment research office at the Chinese Academy of Macroeconomic

Research, told MNI.

     However, Wang said "reasonable people should sometimes be unreasonable."

     CAMR is an institution directly managed by China's powerful economic

planner National Development and Reform Commission.

     Though some have interpreted Chinese President Xi Jinping's announcement on

Tuesday that China will further open up its economy and financial sector as a

comprise to the U.S. for easing trade conflicts, Wang disagrees, noting that

China's active opening to the world only coincides with what the U.S. has

requested.

     --COMPROMISES ON BOTH SIDES

     China is well aware that opening up and reform, which started in 1980s, has

served as a huge contributor to its economic boom and all-round development, and

it will further advance the process, Wang said.

     Beijing is willing to negotiate with the U.S., Wang said, reiterating the

Chinese government's stance. He added both sides are expected to reach an

agreement through negotiations as both governments are reasonable.

     "Both will make comprises," Wang said. "Though it will not be very soon ...

it's a long-term process."

     The political needs of the Trump administration to show its supporters it

can deliver on promises made during the 2016 Presidential Election campaign are

playing a big role in the dispute, Wang said.

     However, the Trump administration, of which many advisors and officials are

conservative-leaning businessmen with close links to multinational corporations,

is unlikely to turn against globalization, knowing the U.S. is one of the

biggest beneficiaries of globalization, Wang stressed.

     "In order to untie the bell, the person who tied it should take it off,"

Wang used a Chinese idiom to explain the key for the current standoff of the

world's two largest economies, suggesting the creator of a problem was best

placed to solve it.

     --RETALIATION

     If the U.S. decides to implement the Trump administration's proposed 25%

tariffs on $50 billion worth Chinese exports as it announced on April 4, China

will certainly retaliate as it vowed -- imposing an equivalent level of tariffs

on U.S. products such as soybeans, aircrafts and chemicals, Wang said.

     "China has to make no comprise" at this stage, Wang noted, though obviously

any measures taken by both sides is at the cost to themselves.

     However, he warned, that the current limited scale of trade dispute could

escalate into a full-blown trade war if the Trump administration "lose its

head," though it might be extremely unlikely as the Senate and the House could

block Trump's damaging trade measures.

     Wang said China should further make its plans more detailed to counter any

possible action by the U.S. However, the government should not be distracted by

the trade dispute, but should focus on further development of the economy and

deepen its reform and opening up, Wang said.

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

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