China hopes talks with US boost coordination
By JOE McDONALD,AP Business Writer AP - 1 hour 15 minutes ago
BEIJING - The global financial crisis is overshadowing U.S.-Chinese trade tensions as Cabinet ministers from the two sides meet this week for talks on the long-range growth of one of the world's most important economic relationships.
Given the unsteady world economy, the two sides are adding the issue of managing risk to the already broad agenda of trade, energy and the environment on the table for the Strategic Economic Dialogue. No grand agreements are expected from the talks Thursday and Friday, which are designed for rapport-building more than negotiation.
But the two huge, increasingly interlinked economies are struggling _ the United States with a recession and China with a sharp fall in growth _ and their ability to maintain a productive relationship is a global concern.
"We need to step up coordination of our macroeconomic policies to ease the current crisis and see the global economy recover at an early date," Vice Finance Minister Zhu Guangyao told reporters last week, without elaborating on what measures Beijing wants to see. "We believe the coming SED will surely make a contribution to this goal."
The twice-a-year talks were launched in 2006 to address tensions that threatened to derail booming trade and to mollify American lawmakers keen to punish Beijing over its swollen trade surplus and currency controls. But the talks seem to have struggled to find purpose, raising questions about whether U.S. President-elect Barack Obama will continue them.
"It forces senior economic and financial officials in both governments to talk regularly. That's unquestionably a good thing," said CLSA economist Andy Rothman. But, he said, "it's unlikely that anything that comes out of the session is going to be big enough to move markets or stabilize the current situation in either economy."
The Americans plan to press the Chinese to let the currency, the yuan, rise further against the dollar and avoid raising trade barriers, Treasury Undersecretary David McCormick said Monday.
The Bush administration believes the need for China to pursue currency reform "is as important now as it has ever been," McCormick told reporters in Washington.
The U.S. and other major trading partners have long complained that the value of the yuan is undervalued, which makes Chinese exports less expensive and adds to the country's trade surplus. While the yuan has risen 20 percent in value against the dollar in the past three years, that climb has faltered in recent months as Beijing tries to help struggling exporters that are seeing foreign demand weaken.
Chinese officials insist they are moving as fast as their economy allows, hoping robust growth will help solve many of the problems. But as global demand slows, conditions have become more uncertain.
The United States also wants faster action from China on easing barriers to foreign competition in finance and other industries. And Washington wants Beijing to improve energy efficiency to ease the strain on global oil supplies.
Officials say President-elect Barack Obama's team has been kept fully informed on the discussions.
The chief American envoy, Treasury Secretary Henry Paulson, has expressed hope this week's meeting also can produce progress toward a proposed U.S.-Chinese investment treaty, work on which began last June. Paulson has warned that the sessions must produce short-term results to win continued support.
The Chinese delegation is led by Vice Premier Wang Qishan. Paulson is to be joined by a Cabinet delegation that includes U.S. Agriculture Secretary Ed Schafer and Labor Secretary Elaine L. Chao.
Beijing has embraced the process, which gives Chinese officials an unusual chance to build ties with their American counterparts.
"The most important result of the Strategic Economic Dialogue is that it has boosted the strategic mutual trust between China and the United States," Zhu said.
"In these closed-door meetings, ministers can have candid discussions," he said. "They can disagree with each other."
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In this May 23, 2000 file photo, Chinese men count money at their fruit stall where California oranges are set for sale at a Beijing fruit wholesale market. The global financial crisis is overshadowing U.S.-Chinese trade tensions as Cabinet ministers from the two sides meet this week for talks on the long-range growth of one of the world's most important economic relationships. Given the unsteady world economy, the two sides are adding the issue of managing risk to the already broad agenda of trade, energy and the environment of their Strategic Economic Dialogue. No grand agreements are expected from the talks Thursday, Dec. 4, and Friday, Dec. 5, 2008, which are designed for rapport-building more than negotiation. (AP Photo/File)
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