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Ambassador Liu Xiaoming Gives Exclusive Live Interview on CNBC

On November 14, 2019, Ambassador Liu Xiaoming gave an exclusive live interview on CNBC with Annette Weisbach after delivering a keynote speech at the Global Markets Conference 2019 held by BNP Paribas. He shared thoughts on Huawei, China-US relations and trade negotiations, China-UK relations, Brexit and other questions. The interview was broadcast on CNBC “Squawk Box Europe” the next morning, and carried on CNBC website and twitter. The transcript is as follows.

Weisbach: There’s a lot of controversy about Huawei’s role in 5G network and its equipments. What is your response here? Can you assure European and also the US consumers that there won’t be any sort of problems with those equipments?

Ambassador Liu: I do not foresee a major problem between Huawei and their business partners, because Huawei is really a good company. They contribute a great deal not only in terms of telecom industry in this country, but also in terms of corporate responsibilities. They employed about 20,000 employees and invested 3 billion US dollars in this country. And they are the leader in 5G. I think the British business partners still welcome Huawei.

There are some noises. I don't want to name the country. They do not want to see Huawei have a better presence in European countries. They twist arms of, they put pressure on these countries. But so far, I think some European countries, like Britain, Germany, and France, have not yet made a final decision. In terms of government decision, I think it is still debated, with divided views.

We understand people might have some concerns. Huawei also understands the so-called security concern, so they try to address this concern. Huawei has set up Cyber Security Evaluation Centre staffed by British people. Huawei paid for this facility to monitor and analyze their own facilities - whether they are secure and safe, whether there's a problem. So they are very transparent. They want to be a good partner. I always say that Huawei will present golden opportunities for China and the UK and for China and European countries to collaborate in 5G. If you kick out Huawei, you really miss opportunities.

So I do hope that, the British government, German government, or French government, they will make decision based on their own national interests, based on their collaboration with China in building a strong partnership with China, but not based on some political witch hunt or, I would call, Cold War mentality. So I do hope Huawei will be here for win-win cooperation. As China will open its door wider, I do hope other countries will also open their doors and will not shut the doors to China.

Weisbach: You have said Cold War. And it feels a bit that these geopolitical tensions between United States and China do have a bit of a feel of the Cold War. And also, it feels that Europe has to make up its mind, at least the pressure is on Europe. How do you see China positioned here?

Ambassador Liu: We make it very clear. We're not interested in any war, whether it is cold war, or hot war, or trade war with the United States. We want to build a cooperative, coordinated, a non-confrontation relationship with the United States. We believe that there will be no peace or prosperity in the world without sound relations between China and the US, the two largest economies in the world. We always believe that China and the United States will benefit from cooperation and lose from confrontation. So we are not interested in any wars with the United States. I'm very pleased that Chinese and American negotiators are working very hard to address trade issues.

With regard to Europe, we do not ask European countries to take side between China and the US. The UK has a special relationship with the US, but we’re also building a “golden era” between China and the UK. So we want to work for win-win, not a zero sum game. Not Europe wins, America wins and China loses. Not China wins, Europe wins and America loses. We want win-win for all. That is our position.

Weisbach: Let's talk about this phase one deal between the US and China, and where the sticking points are, because it seems that the deal is within reach but there seems to be some sticking points. What are they from the Chinese position?

Ambassador Liu: I think the negotiators are still very much occupied with the details. I do not have the details. Even if I had, I would have to be cautious. I don't want to interrupt the process. But I think the tariffs might be one of the very important issues, based on my understanding of the negotiations. Because the trade war started with the tariffs, it should be ended with removing all the tariffs imposed by the other side, because it is not in the spirit of free trade. So we do hope that we can clinch the phase one deal sooner, so that we can move on to phase two and phase three.

Weisbach: What one is hearing is that intellectual property rights are also at the center of that debate or the negotiations. Would China be in a position to compromise a bit in that stance?

Ambassador Liu: China has made great efforts in the past 40 years since the reform and opening up in terms of improving the intellectual property right. First, I would say people should recognize the tremendous progress that China has made in this respect. Number two, we also realize that we need to do more. As I always say, the largest room in the world is the room for improvement. So no country is perfect, but we are serious about addressing the concerns of other countries, including the United States. That is the second point I want to make.

Third, I don't think resorting to war of words, accusing each other, is helpful at all. Some politicians criticize China for so-called “stealing technology” from the United States. I think they have a wrong impression. China’s miracle is not built on theft of other countries’ property. It's built by the hard working people of China in the past 70 years. So I think you really have to address this issue in sincerity and try to tackle this problem with honesty, sincerity, rather than accusing China of so called stealing. That will be helpful for the two sides to work on this important issue.

Weisbach: President Trump once said the trade war is easy to win. What would you respond to that?

Ambassador Liu: I said on many occasions that there will be no winners in trade wars.

Weisbach: And let's talk about the further evolution of the trade negotiations. What do you think will be the timeline? Because we are clearly, next year, heading into new elections in the United States, so it could be all tied together. Would the Chinese position rather be to wait and see who will be the next president?

Ambassador Liu: I don't think that is China's position. We are open-minded. We always want to resolve this problem sooner than later because we believe it is in the interest not only of China but also of the United States, also of the world.

The trade war between China and the United States really created a lot of uncertainties and unpredictabilities. And I think the world is watching. I think the negotiators of the two countries really have a big duty on their shoulders. I don't think it is the intention of China to wait and see. That is not our position. We want to clinch the agreement as soon as possible. But you need two to tango, right?

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