US pressure on China to bridge trade gap

Washington, April 10:

The Chinese are bringing their checkbooks to buy American jetliners, computer programmes and farm products. But the multibillion-dollar shopping spree may fail to ease growing trade tensions with the US without significant policy changes by Beijing.

The Bush administration is hoping for major progress in getting China to crack down on rampant copyright piracy, lower barriers to US exports and allow its currency to rise in value against the dollar. The efforts are ai-med at reducing a US trade deficit with China that soa-red to an all-time high last year of $202 billion - more than one-fourth of this co-untry’s record $724 billion imbalance with the world.

A Chinese delegation headed by vice-premier Wu Yi began a 13-state buy-America tour on Thursday in Los Angeles. It came with the expectation that major trade deals covering the purchase of Boeing jetliners, computer software, aut-o parts, telecommunication products and farm goods will be signed to show China’s desire to deal with the deficit. Worried that the rising anger against China could hurt Republican cha-nces at the polls in November, the administration has been sounding a tougher li-ne. Last month, it filed an unfair-trade case against China involving US auto parts and pledged more ca-ses to come unless negotiations start showing results.

The first test of the new get-tough policy will come tomorrow when commerce secretary Carlos Gutierrez and US trade representative Rob Portman meet with Wu’s delegation for the annual meeting of the Joint Commission on Commerce and Trade, a group formed to deal with economic tensions between the two countries.

Those discussions are being held in advance of a White House visit on April 20 by Chinese president Hu Jintao. If progress isn’t made over the next two weeks, industry groups are warning there could be a backlash in Congress.

“Checkbook diplomacy is not a bad thing, but it can’t take the place of systemic changes that are needed to level the playing field for American companies,” said Myron Brilliant, vice-president for Asia at the US Chamber of Commerce.

Frank Vargo, vice-president for international trade at the National Association of Manufacturers, said China must realize this is a critical time for US-Chinese relations. “Everything is on pause waiting for these meetings,” Vargo said, “They can move the relationship forward in a positive way. But if nothing comes out of them, that can fan the flames of those in Congress who want to take matters into their own hands.”

Administration officials said they planned to press China for commitments to boost purchases of American farm products and eliminate barriers that are hampering US service companies trying to do business in China, such as financial institutions and express-delivery firms.