Nov. 22, 2011
by Zhu Shanshan
Vice Premier Wang Qishan addressed US concerns over bilateral trade on Monday, warning that an unbalanced recovery would be better than a balanced recession given the current gloomy world economy.
Speaking at the annual US-China Joint Commission on Commerce and Trade (JCCT) in Chengdu, Sichuan Province, Wang said that stable development between the two sides would bring positive contributions to the world, and that Beijing is ready to conduct closer and broader economic cooperation with Washington.
“One thing that we can be certain of, among all the uncertainties, is that the global recession caused by the international financial crisis will be chronic,” Wang said, adding that recovery will remain the primary task and that the two sides should form a solid partnership to face the challenges.
In response to mounting US pressure over yuan appreciation and other trade issues, the vice premier, who oversees China’s financial sector, urged Washington to relax controls on high-tech exports, avoid the abuse of trade remedies, recognize China’s market economy status and give equal treatment to Chinese companies that invest in the US.
Zhou Dunren, a deputy director of the Shanghai Pudong Institute for the US Economy, said Wang’s remarks were a warning to US officials that by imposing unreasonable duties on Chinese goods or forcing the yuan to appreciate, Washington might achieve its goal of reducing its trade deficit but in so doing harm both economies and the global recovery.
The vice premier’s statement came after US Commerce Secretary John Bryson, who co-chaired the JCCT with Wang, said Sunday that “many in the US, including the business community and Congress, are moving toward a more negative view” on the bilateral trading relationship.
Bryson also repeated US President Barack Obama’s “frustration” with China’s trade policy.
Washington has been accusing Beijing of deliberately keeping the yuan’s value low to gain a trade surplus, which harms employment in the US. However, China rejects such accusations and blames the US for setting up trade barriers.
According to the US Census Bureau, by the end of September, US trade in goods with China stood at a deficit of $217 billion, about $15 billion higher than the same period last year.
Meanwhile, analysts predict China’s economy is heading toward a soft landing due to a drop in exports and a tightened monetary policy to soak up liquidity. The government is also adopting measures to encourage domestic consumption.
China’s economic expansion has shown signs of a slowdown with GDP growth down to 9.1 percent in the third quarter from 9.5 percent and 9.7 percent in the first and second quarters respectively.
Zhao Zhongxiu, the dean of the School of International Trade and Economics under the University of International Business and Economics, noted that the world should not look to China as a savior because it cannot absorb all their exports.
“Chinese policymakers should strike a balance between growth and economic restructuring, given that we have already witnessed a slowdown in GDP growth. The restructuring should not come at the price of growth, and vice versa,” Zhao told the Global Times.
He noted that the high trade deficit has been a chronic structural problem for the US, and that Washington has made Japan and Germany scapegoats for the problem in the past.
Meanwhile, after the JCCT meeting, the two sides signed five economic and trade agreements related to intellectual property rights, technology, trade statistics, energy and business cooperation.
According to the agreements, foreign automakers are allowed to invest in the green vehicle market without transferring their technology to Chinese enterprises or establishing a local brand.
Bryson told reporters on Monday that China had confirmed that, in the coming five years, it plans to invest $1.7 trillion in “strategic sectors,” such as biotechnology, new-generation information technology, energy-saving and environmentally friendly technologies.
Bryson added that Wang said US and other firms would enjoy the same opportunities as Chinese firms to help these sectors grow.
“We had a very good dialogue on China’s strategic emerging industries, and we welcome China’s commitment that it will create a fair and level playing field for US companies in those industries,” Bryson said.
“Washington has complained that US companies were at a disadvantage while competing with indigenous companies in government procurement. By promising a level playing ground, Beijing is reassuring foreign businesses,” Zhou said.
He noted that if the US exports advanced technologies in these sectors to China, the trade imbalance between the two sides could be eased.
Yang Jingjie and agencies contributed to this story