Critical opening remarks by US treasury secretary Henry Paulson and Chinese vice premier Wu Yi, set the tone for two days of high-level economic talks between the US and China that commenced in Beijing yesterday. While Paulson accused China of keeping the value of its currency artificially low to generate trade surpluses through cheap exports, and said that there was scepticism in the US over any substantive results emerging from these talks, Wu criticised the US of harbouring misunderstanding about the reality in China. She warned that this was not conducive to the sound development of our bilateral relations
A team of senior US government representatives is currently in Beijing to urge China to change its economic policies, aimed at reducing US trade deficit with China, which has now replaced Mexico as the largest trading partner of the US.
The US delegation, comprising Ben Bernanke, chairman of the US Fed, Henry Paulson treasury secretary and other senior members of the US cabinet, are in China to press, among other things, for an appreciation of the yuan, reduce barriers to foreign investment and take effective measures to curb piracy and theft of intellectual property.
The composition of the delegation has led to its mission being dubbed as "a strategic economic dialogue" since it is extremely rare for the head of the US Fed and the treasury secretary to jointly meet their counterparts on economic negotiations.
US data reveals its deficit with China had risen by 6.1 per cent in October 2006, compared with the previous month.
In November China's total trade surplus rose to a record $22.9 billion, taking the year's total surplus to an all-time high $156.52 billion, according to figures released by China's customs department.
Meanwhile, the 83-year old former US president, George Bush, Sr, warned that if China did not address the rising US deficit, caused by US-China trade, the Asian giant risked a backlash from protectionist elements in the new Democrat-controlled legislature.
This week also marks the completion of five years of China having joined the WTO.
Earlier on Monday, the US trade commission issued a report assessing China's record in implementing requirements demanded by the WTO. US trade commissioner Susan Schwab has called China's overall record as "decidedly mixed", with said some industries faced "frustrating barriers" when doing business in China. She also highlighted concerns that China's market liberalisation had been slowing down in the past year.
also see : US delegation
to China to push for more trade, currency reforms
trade surplus hits $157 billion; November surplus at
record $22.9 billion