Beijing, June 1: China on Sunday urged the United States to grant it permanent most favoured nation (MFN) trade status, warning that any cancellation would hurt US hopes for grabbing a slice of the huge Chinese market.``If the US provides permanent MFN and further relaxes technology export controls to China, Sino-US economic cooperation will go forward,'' the China daily Business Weekly quoted vice-minister of foreign trade Sun Zhenyu as saying.The United States currently reviews MFN status for China annually, ``casting a pall of uncertainty over the prospect of Sino-US business'', the newspaper said.Sun said Washington, ``should encourage bilateral trade and investment by permanently settling the MFN issue''. Last month, US President Bill Clinton announced a plan to renew MFN - which amounts to normal trade tariff status - for China for another year despite disputes with Beijing on many issues, notably human rights.The US Congress is expected to mount its fiercest battle in years to overturn Clinton's decision.

Vice minister Sun warned against any cancellation of MFN and said China was too big a market for Washington to ignore.China's imports were forecast to exceed $700 billion over the next three years, Sun said, adding that the country needed to buy at least $100 billion worth of technology and equipment each year through 2,000. ``We welcome US businesses to compete in the Chinese market,'' Sun said.``The cancellation of MFN is a double-edged sword that hurts not only China, but US middle and lower-income consumers, as well as US investors in China,'' Sun said. ``It should not be mistaken as a one-sided arrangement.''The United States was the second largest foreign investor in China, pouring about $14 billion into more than 20,000 projects to date, the newspaper said.Cancellation of China's MFN status would also hurt Hong Kong as a free trade and world financial centre, the vice minister said.

The territory is due to revert to China at midnight on June 30 after 156 years of British colonial rule.Last month, US House of Representatives speaker Newt Gingrich said this year's MFN decision would be closer than last year's 286-141 vote in the House to back Clinton on MFN. But advocates and even opponents expect the president's policy ultimately to survive.MFN gives China the normal trade status the United States accords all but six nations: Afghanistan, Cuba, Laos, North Korea, Serbia and Vietnam. Iran, Iraq and Libya technically enjoy MFN status but are subject to separate trade embargoes.The move to renew China's MFN status is an annual decision that every president has made since 1980. The United States has an interest in maintaining normal trade relations. US officials estimate that 1,70,000 US jobs depend on exports to China and that ending MFN could cost US consumers $600 million a year in higher prices for shoes, clothing and appliances.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.