REPEAT: MNI: China/US Talks Not Appropriate Now: Expert

     BEIJING (MNI) - Now is not an appropriate time for Beijing and Washington

to engage in trade talks given that the U.S. currently appears keen on

escalating -- rather than de-escalating -- rising trade tensions, a former

veteran Chinese trade diplomat to the U.S. told MNI on Wednesday.

     "The problem does not lie in China but the U.S. if the two nations do not

end up with an agreement," He Weiwen, former Economic and Commercial Counselor

at Chinese Consulates General in San Francisco and New York, said in an

interview with MNI. "The U.S. has not shown its sincerity to negotiate. It only

wants to make China feel the pain with tariff action."

     On Tuesday, the Office of the United States Trade Representative announced

the checklist to make good on its threat of placing tariffs on an additional

$200 bn of Chinese imports, following the imposition of a first round of levies

on $34 billion of goods on July 6 -- to which Beijing retaliated immediately.

     He Weiwen, who also serves as Executive Council Member of China Society of

WTO Studies, claimed that Washington's unilateral 301 investigation and tariff

action that have violated WTO rules and thus has no international legal basis,

only overly focused on self-interest.

     The trade expert told MNI that Beijing has made preparations for a second

round of tariffs, in line with a MOFCOM statement on Wednesday that China will

once again react to any forthcoming U.S. tariffs in a reciprocal fashion.

     China does not want a trade war, but it has to fight back when the US

imposes a trade war on China, known as "war to stop war," He said, adding that

trying to compromise with the U.S. will be unfruitful at the moment, whereas

standing up to the U.S. now may help lead to cooperation in the longer term.

     Lighthizer's Tuesday statement also criticised China's industrial policy,

which he says has "resulted in the transfer and theft of intellectual property

and technology to the detriment of our economy." The U.S. has been pushing China

to change its ambitious "Made in China 2025" industrial plan, designed to

upgrade and develop its technology and high-end manufacturing segments to help

in switching to a high-quality growth model.

     He Weiwen told MNI that the U.S. has no right to intervene in China's

domestic policies: "China doesn't need to change its policies for the sake of

U.S. interests. Both sides should discuss if any specific measures in the 'Made

in China 2025' plan are against WTO rules -- and China is willing to make

adjustments if there are any."

     But, he pointed out, such judgments should not be based on U.S. domestic

laws such as Section 301 of the Trade Act of 1974, which allows the U.S.

President to unilaterally impose trade measures.

     To counter the small expected drag on economic growth from U.S. tariffs,

China should slow deleveraging and -- more importantly -- expand its domestic

demand base, diversify its export sector and actively seek alternative trade

partners, He told MNI.

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

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