WASHINGTON: Treasury Secretary Henry Paulson said on 22 May the United States was impatient for forceful Chinese action to cut trade deficits but Chinese Vice Premier Wu Yi said Beijing would not yield to pressure.
“There is growing skepticism in each country about the other’s intentions,” Paulson said at the start of two days of talks with a top-level Chinese delegation and amid growing anger in the US Congress over China’s huge trade surplus.
“Unfortunately, in America this is manifesting itself as anti-China sentiment as China becomes a symbol of the real and imagined downside of global competition,” Paulson said.
Wu said politicizing differences over trade issues would only make matters worse -- a shot across the bows of US lawmakers who threaten to restrict Chinese imports unless China’s yuan currency appreciates.
While early signs suggested the talks would not produce anything substantive, US officials said they were nonetheless important for advancing a dialogue between two countries that accounted for half of global economic growth in recent years.
“These are not negotiating sessions,” US Commerce Secretary Carlos Gutierrez told reporters. ”This is not intended to walk out with specific short-term deliverables.”
A document prepared by US Trade Representative Susan Schwab’s office and obtained by Reuters said there had ”as yet been no agreements to take any concrete steps” on expanding foreign ownership in China’s financial services sector, one of Paulson’s principal goals.
For its part, however, China expressed a readiness to buy more US-made goods.
“We’re willing to take effective measures together with the US side to address bilateral trade imbalances,” Wu told the opening session. ”These measures include increasing imports from the United States by China.
Wu, a skilled trade negotiator who is leading a delegation that includes 15 Cabinet-level officials, cautioned against a tendency to “blame the other side for our own domestic problems, or even force one’s own will by imposing pressure on and confronting with the other side.”
The talks mark the second round of a “strategic economic dialogue” kicked off in Beijing in December.
The US side wants to let Wu know that the White House is losing its ability to hold off congressional ire at a US trade gap with China that hit a record $233 billion last year.
While US legislators complain an undervalued yuan gives Chinese producers an unfair trade edge, Chinese officials say Americans benefit from closer ties to Beijing.
LOOKING FOR DEALS
Ma Xiuhong, China’s vice commerce minister, told reporters a touring group of Chinese firms would sign at least $20 billion in trade deals with US companies. The group, representing more than 200 companies, will wrap-up a two-week 24-state US buying binge on May 24.
China offered a gift of sorts on Friday, widening the band within which the yuan trades. But the measure failed to satisfy US lawmakers who said Beijing needed to not only let the yuan rise, but also to stop stealing US copyrights.
Paulson, a former Goldman Sachs chief with long-standing business ties with the communist giant, will take Wu to Capitol Hill on Wednesday and Thursday to give her a first-hand taste of the frustrations expressed by US lawmakers.
One congressman who will meet Wu on Wednesday, House Trade Subcommittee Chairman Sander Levin, a Michigan Democrat, said that lawmakers were disgruntled with the Bush administration’s go-softly approach to Beijing.
“There’s been a difference of opinion with Secretary Paulson. He’s essentially relied on structural changes within the Chinese government and we say we can’t wait,” Levin said.
Earlier in Beijing, a spokeswoman said Wu would lobby Congress on the benefits of close trade relations.
China announced on Monday that it was increasing taxes on metal exports to rein in its huge trade surplus and it said last week that it intends to import more in future.
Wu is expected to meet President George W. Bush on Thursday, ahead of a speech she delivers to a business audience that might spell out China’s reasons for proceeding cautiously in moving its economy toward a more market-driven one.
The vice premier is scheduled to visit a Boeing plant in Seattle after the summit ends but it was unclear whether she will announce any deals there.