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. Last Updated: 07/27/2016

China Urges End To MFN Debate

BEIJING -- China on Tuesday welcomed U.S. President Bill Clinton's decision to renew Most Favored Nation, or MFN, status for Beijing, but urged Washington to halt the annual review process that it said was outdated and erroneous.

"I think this decision by President Clinton is a wise one," Chinese Foreign Ministry spokesman Cui Tiankai said. "We welcome it."

In Washington, Clinton said Monday he would renew China's MFN trading privileges unconditionally when it comes up for review early next month.

He made clear Washington's intention to maintain stable relations with a country that could in two decades become the world's largest economy and a global political and military superpower.

China urged Washington to stop the annual review system.

"The U.S. annual review is not conducive to the establishment of long-term, stable and normal economic and trade relations," Cui said. "We hope the U.S. side can change this kind of outdated and erroneous way of doing things."

On Monday, Clinton said revoking the favorable U.S. tariff treatment for Chinese imports would amount to severing of economic ties and "drive us back to a period of mutual isolation and recrimination that would harm America's interests, not advance them."

However, he said U.S. policy would include "using incentives and disincentives alike to advance core American interests."

Chinese Vice Premier Li Lanqing welcomed MFN renewal for China for another year but criticized U.S. threats to impose sanctions over trade disputes.

"I feel that it is harmful to long-term Sino-U.S. economic and trade cooperation for China and the United States to argue about this problem each year," Li told a seminar in Beijing. "It will create psychological instability on both sides and will have no good results."

Referring to looming tit-for-tat sanctions announced by Beijing and Washington in a dispute over copyright piracy in China of U.S. videos and compact discs, Li said: "I don't know who will be imposing sanctions on whom or who will be containing whom.

"I feel that this is inappropriate. We are not willing to see a trade war. Disputes in trade can be ... resolved through negotiations."

There was no sign that Clinton's decision would have an immediate impact on easing the trade dispute, which, last week, caused the United States and China to announce plans for multibillion dollar trade sanctions.

China's MFN privilege expires July 2. Clinton must notify Congress by June 3 that he is extending it for another year. U.S. officials said they expected a tough fight in Congress, which has 60 days to vote against the extension.