REPEAT: MNI INTERVIEW: China May Make Concessions After Talks

     BEIJING (MNI) - China is expected to make partial concessions towards U.S.

demand for structural reform and preventing forced technology transfers after

bilateral trade talks this week, although it is unlikely to commit to specific

quantities of imports, a trade advisor for the Ministry of Commerce told MNI on

Wednesday.

     The two sides will declare consensus on several principles and some issues,

"but the language may be vague," said Lu Jinyong, vice president of China

Association for International Economic Cooperation managed by the Ministry of

Commerce. He added that both countries wanted to send a clear message that the

talks have produced positive results and that the probability of reaching a

final deal had risen.

     China is expected to make partial concessions on structural reform, and

could accept changes in the management and operation of economically dominant

state-owned companies, Lu said. China is also likely to order local governments

not to extract technology transfer from foreign companies, although it doesn't

recognize that it has ever officially condoned such practices, he said.

     In addition, China will likely declare its willingness to further increase

imports of U.S. agricultural goods, including soybeans, beef, fruit and dried

foods, as well as machines such as autos and aircrafts, as well as energy

products such as oil and natural gas. But specific quantity promises likely

won't be made until future negotiations, he said.

     "China may accept some 'flexible' quantity requirements, such as reducing

its trade surplus by certain percentages over some timeframe, for instance,

within a couple of years," Lu told MNI.

     China may agree to buy more liquefied natural gas from the U.S. despite its

being farther than other suppliers such as Russia or Asia, Lu said. It may even

propose to form energy partnerships with the U.S..

     Major Chinese state-owned oil companies, such as China National Petroleum

Corp. and Sinopec Corp., could be directed to import more crude oil from the

U.S., and China may agree to specific amounts in future higher-level

negotiations, Lu said.

     On services, China may further increase imports of cultural products such

as films, television shows, allow more spending in tourism and education in the

U.S., and lift more market access restrictions, Lu said.

     Lu's comments came before the talks in Beijing concluded on Wednesday, with

both countries expected to make a statement on progress soon.

     If no deal is reached by March, the U.S. says it will raise tariffs on $200

billion worth of Chinese imports to 25% from 10%.

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

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