CHINA said yesterday that the US intention to renew its most-favoured nation (MFN) trading status would reduce bilateral tension but was not enough to overcome all obstacles in the way of closer relations. Senior officials said they were not surprised by Secretary of State Warren Christopher's announcement that the US would extend the status, adding that the gesture was a recognition that both sides needed each other strategically. Mr Christopher, speaking in The Hague after talks with Qian Qichen, the Chinese Foreign Minister, said MFN status would be renewed 'in the interests not only of Beijing, but also of Hong Kong, Taiwan and all other countries in the region'. Dong Fureng, vice-chairman of the National People's Congress Finance and Economic Committee, said: 'This is a welcome move, as a cancellation would definitely harm China's and America's economic and political interests.' He said that as both were major trading partners, it made strategic sense to return to more harmonious relations. Sino-US relations had been plagued by rifts - including over the US visit of Taiwan President Lee Teng-hui, allegations that China did not abide by an intellectual property deal, and human rights abuses - leading to calls from some Congressmen to cancel the MFN status for China. Mr Dong said until the US washed its hands of Taiwan, and treated it as an issue of China's internal politics, bilateral ties would continue to be stormy. Qiu Xiaohua, spokesman of the State Statistical Bureau, said he was not surprised by the proposed renewal, but called on the US to separate politics from economics. 'The Chinese government has always felt that economics is economics, and should not be affected by politics.' The decision to award France large-scale contracts during Premier Li Peng's visit to the country last week was based on commercial considerations. European aircraft giant Airbus Industrie landed an order for 30 aircraft worth US$1.5 billion, its biggest mainland contract. 'The business awards are based on economics, who can provide the best price and package,' Mr Qiu said. 'China is a very huge market, and there is room for US as well as other foreign businesses,' he said. US aircraft manufacturer Boeing said two days ago that the worsening relations would delay its sales to China. Boeing said Chinese airlines were ready to buy US$4 billion of its aircraft, but the contracts were being held up by Beijing. Mr Qiu said China valued good economic ties with the US, which had technology and skills to sell to China. 'There should be mutual respect on both sides, and that means the US has to resolve the rift over Taiwan satisfactorily with China.' Huang Huijiong, a deputy director of an unit under the State Council's Development Research Centre, suggested both countries focused on long-term co-operation. 'I think if tension comes to a head, the US would suffer more than China,' he said.