US embarks on key Chinese talks

US embarks on key Chinese talks
BBC News - UK
.... the yuan, being artificially weak. This makes Chinese exports to the US
cheap in comparison with US goods. The summit, which is ...


Last Updated: Wednesday, 13 December 2006, 16:09 GMT

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US embarks on key Chinese talks

US firms have long accused China of keeping the yuan artificially weak
US Treasury Secretary Henry Paulson has arrived in Beijing for what is thought
to be one of the most important US trade delegations to China in months.
Key topics include currencies, access to markets and information piracy.

The delegation includes the Federal Reserve's head Ben Bernanke and US Trade
Representative Susan Schwab.

This week marks five years since China joined the World Trade Organization, but
the US feels China still has much to do to open its markets as required.

'Barriers'

The visit comes days after the US issued a report assessing China's record in
implementing requirements demanded by the WTO.

"China has taken many important steps to implement its WTO obligations, but on
the fifth anniversary of its WTO membership, China's overall record is decidedly
mixed," said Susan Schwab following the report.

Ms Schwab also said come industries face "frustrating barriers" when doing
business in China, and highlighted concerns that China's market liberalization
had been slowing down in the past year.

But analysts also say China has transformed into a far more sophisticated nation
in the past five years - and that Mr Paulson and his mission will face a country
that is more assertive in trade matters.

The trip comes amid mounting pressure for China to reform its currency, and a
day after data showed that China has replaced Mexico as the second largest
trading partner with the US.

The US - the world's largest economy - posted figures showing its deficit with
China had risen by 6.1% in October compared with the previous month.

Critics blame the growing deficit with China largely on China's currency, the
yuan, being artificially weak.

This makes Chinese exports to the US cheap in comparison with US goods.

'Effective rules'

The summit, which is being billed as a "strategic economic dialogue", follows a
range of commercial deals signed between the two nations.

Commercial engagement built on fair, effective rules is the foundation of the
healthy, strong and continually growing trade relationship that we envision
between China and the US

Commerce Secretary Carlos Gutierrez

US retailer Home Depot bought a chain of Chinese DIY stores, while GE Aviation
is selling engines to a Chinese airline.

"Commercial engagement built on fair, effective rules is the foundation of the
healthy, strong and continually growing trade relationship that we envision
between China and the US," said Commerce Secretary Carlos Gutierrez, following
the deals.

As well as trade, a key topic of discussion will be piracy.

On Wednesday, China's official news agency announced a campaign to tackle
manufacturers of fake goods.

US officials say Chinese pirated goods cost genuine producers as much as $50bn
(£24.4bn; 37.8bn euros) annually in lost earnings.



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