China seeks balance in US-China trade: Hu

Beijing(China)—China’s President Hu Jintao told President George W. Bush he will seek more “balanced” trade relations with the US, moving to ease tension over the size of China’s trade surplus.
“China is willing to work with the US to make our relations stable, sustainable and healthy,” Hu told Bush in a telephone call last night, the Chinese Foreign Ministry said in a statement on its Web site today. Bush called Hu, said Susan N. Stevenson, a spokeswoman for the US Embassy in Beijing.
The US trade shortfall with China totaled $166 billion in the year through September, close to the $169.4 billion combined deficit with Japan, Canada and Mexico. Hu’s pledge came ahead of a visit to Beijing by US Treasury Secretary Henry Paulson, who has been pressing China to buy more American goods and allow faster fluctuations in the yuan, and Federal Reserve Chairman Ben S. Bernanke.
The two presidents met on Nov. 19 on the sidelines of the Asia-Pacific Economic Cooperation summit in Hanoi to discuss the trade imbalance, with Bush asking Hu to “unleash the spending power” of Chinese consumers to boost American exports. Bush last called Hu in August, Stevenson said, declining to comment on the contents of the talks.
‘Tension’ in Relationship
“There has been a fair amount of tension in the economic relationship,” Paulson said in response to questions after a speech in London today. “Part of this relates to a feeling that’s fairly widespread in the US that the benefits of the trade between our two countries aren’t being shared evenly or fairly.” He reiterated that China needs to show greater “currency flexibility.”
US Lawmakers such as Senators Charles Schumer, a New York Democrat, and Lindsey Graham, a South Carolina Republican, have called for a tougher White House stance on China’s economic, monetary and trade policies.
China pegged the yuan, a denomination of the renminbi, at about 8.3 to the dollar until July 2005, when it revalued the currency 2.1 percent higher. The currency was subsequently pegged to a basket of currencies and has since risen 3.3 percent.
Tariffs and Currency
In September, Paulson used the gradual rise in the yuan to convince US lawmakers, including Schumer, to drop legislation to levy tariffs on Chinese imports unless the currency appreciated faster.
Still, political pressure for a more rapid rise in the yuan may increase after the Democrats earlier this month won majorities in both the Senate and House of Representatives.
There “are going to be trade difficulties” between US and China, Bush said in Hanoi.
Earlier this month, a US congressional commission accused China of violating global trade rules and recommended that US companies be allowed to ask for new tariffs on imports from China. The panel also said the US should file a complaint at the World Trade Organization over China’s currency policies and failure to curtail intellectual property piracy.

—Daily Mail, People’s Daily news exchange item