CHINA CITES PROGRESS IN TALKS ON OPENING MARKET TO US

CHINA CITES PROGRESS IN TALKS ON OPENING MARKET TO US

This week's talks on better access for U.S. exports to the Chinese market made "some progress on certain questions," the ministry of foreign economic relations and trade said Tuesday night.

A similar report, carried by state television, added that China "will continue to reform its trade system, particularly its import system."Support for the idea of progress came earlier in the day when Assistant U.S. Trade Representative Joseph Massey agreed to hold a Beijing press briefing today. He said previously he wouldn't make any statements until arriving in Hong Kong.

This round of talks came against the background of the U.S. Senate's vote on whether to renew most-favored-nation trade eligibility for China. That status is granted to all but a handful of U.S. trading partners, ensuring them the lowest available tariffs.

The Chinese ministry statement recalled that Beijing is applying to rejoin the General Agreement on Tariffs and Trade, or GATT, the Swiss-based referee of world merchandise trade. That broadly requires an open market and minimal state interference.

"Upon rejoining GATT, China is prepared to honor all commitments assumed by other signatories, and expects to enjoy all rights," the statement said. ''Therefore, China will continue to reform its managerial structure of foreign trade (and) will guide its administration of imports nd exports in accordance with regulations concerning multinational trade."

The United States perceives four stumbling blocks to access for its goods to China, while operating a free market for China's goods other than those regulated by quota.

China insists the current market-access talks be conducted on the basis of GATT requirements for developing countries and "the principle of equality and mutual benefit." It urges Washington to adopt a "flexible stance."

The two sides agreed that a sixth round of market-access talks will be held in Washington early in April.

Without agreement China risks 100 percent tariffs on billions of dollars worth of exports to the United States, its principal market. Washington rejected an earlier Chinese program last October, ordering instead a wide- ranging inquiry into Chinese trade practices.

The U.S. Commerce Department reports China's trade surplus against the United States hit US$12.7 billion last year, less than some had predicted, but up from US$10 billion in 1990. China insists it is in deficit, but doesn't count huge re-exports via Hong Kong in its tally.

Meanwhile, in Singapore, an official of McDonnell Douglas Corp. warned that renewal of MFN status will be crucial to its multi-billion dollar deal to make and sell airliners in China.

"China will definitely take retaliation if the U.S. does not renew MFN status," McDonnell Douglas president for Asia-Pacific, Gareth Chang, told Reuters news agency.

China Aero-Technology Import & Export Corp. and McDonnell Douglas agreed in principle late last year to produce 150 MD-90 airliners seating 158 people at a sale price of about US$35 million each, and 20 MD-82s of 143 seats at about US$30 million each.

The two also plan to make at least 75 MD-95 aircraft with 105 seats worth about US$20 million each.

"What I am concerned about is the U.S. election. During the run-up to the election, will there be enough support from the Senate for (President) Bush's administration to renew MFN status to China? That's a key point," Mr. Chang said.

If Congress votes to cancel MFN, as it did last year, Mr. Bush is again expected to veto the move. Opponents are not thought to have sufficient votes to override his veto.

China has said several times it would deem "unacceptable" any conditions attached to MFN renewal. It is being opposed on human rights as well as strict trade grounds.