Necessary reforms of the World Trade Organization should leave basic principles of trade liberalization unchanged and take into consideration developing countries' reasonable demands, the Ministry of Commerce said on Thursday.

Such reforms, a step-by-step process, should be based on mutual respect and benefits, ministry spokesman Gao Feng said at a news conference.

He said China will support the multilateral trading system in its keeping pace with the times, as this principle of the WTO has always played an irreplaceable role in opposing protectionism.

"The WTO is not perfect," Gao said, stressing that the organization's authority and effectiveness are threatened by the prevalence of protectionism and unilateralism.

The United States has for the past several months been wielding a tariff stick against economies including the European Union, Canada and China.

Mei Xinyu, a researcher at the Beijing-based Chinese Academy of International Trade and Economic Cooperation, said, "International cooperation that took decades to crystallize is now under threat from rising protectionism and unilateralism of the kind that the US has embraced in recent months."

For instance, the US tariff action under Section 301 of US Trade Act of 1974 violated the principle of most favored nation status because US measures targeted only China but not any other country, according to Xiao Jin, a partner at King & Wood Mallesons, a multinational law firm.

Most favored nation status is essentially a method of establishing equality of trading opportunities among states by making originally bilateral agreements multilateral.

Given the current situation, WTO reform should strengthen the organization's authority and leadership, and consolidate the basic functions and role of free trade principles and the multilateral trading system, to better promote global free trade and economic globalization, said Xue Rongjiu, deputy director of the China Society for WTO Studies.

"Free trade arrangements among WTO members are a helpful supplement and a positive driving force for the multilateral trading system," Xue added.

Also at the news conference, Gao said China will continue its set course to open the economy, promote domestic reform and boost high-quality economic growth.

Asked about arrangements for the next round of trade talks, Gao said restarting negotiations depends entirely on the US. He stressed that China has always opened its doors to negotiate with US, but during trade talks, the sides must display sincerity, treat each other in an equal manner and keep promises.

"We hope that the Sino-US economic and trade frictions can be properly resolved. Meanwhile, we are getting ready to respond to various possible situations," Gao said.

According to a Fung Business Intelligence report, sourcing businesses need to get prepared for possible escalation of China-US trade tensions and carry out strategic planning and revised planning for their supply chains to mitigate potential negative impacts on their business.

This includes exploring alternative sources of supply, redirecting shipments and restructuring production chains, the report said.

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