WASHINGTON – The Chinese are bringing their checkbooks to buy American jetliners, computer programs and farm products. But the multibillion-dollar shopping spree may fail to ease growing trade tensions with the United States without significant policy changes by Beijing.
The Bush administration is hoping for major progress in getting China to crack down on rampant copyright piracy, lower barriers to U.S. exports and allow its currency to rise in value against the dollar.
The efforts are aimed at reducing a U.S. trade deficit with China that soared to an all-time high last year of $202 billion – more than one-fourth of this country’s record $724 billion imbalance with the world.
A Chinese delegation headed by Vice Premier Wu Yi began a 13-state buy-America tour Thursday in Los Angeles. It came with the expectation that major trade deals covering the purchase of Boeing Co. jetliners, computer software, auto parts, telecommunication products and farm goods will be signed to show China’s desire to deal with the deficit.
Worried that the rising anger against China could hurt Republican chances at the polls in November, the administration has been sounding a tougher line. Last month, it filed an unfair-trade case against China involving U.S. auto parts and pledged more cases to come unless negotiations start showing results.
The first test of the new get-tough policy will come today when Commerce Secretary Carlos Gutierrez and U.S. Trade Representative Rob Portman meet with Wu’s delegation for the annual meeting of the Joint Commission on Commerce and Trade, a group formed to deal with economic tensions between the two countries.
Those discussions will be followed by Chinese President Hu Jintao’s visit to the White House April 20. Before his trip to the White House, Hu will fly to Everett for tours at Microsoft and Boeing’s Everett plant and for a luncheon at which he is expected to make a major policy speech.
If progress isn’t made over the next two weeks, industry groups are warning there could be a backlash in Congress.
“Checkbook diplomacy is not a bad thing, but it can’t take the place of systemic changes that are needed to level the playing field for American companies,” said Myron Brilliant, vice president for Asia at the U.S. Chamber of Commerce.
Frank Vargo, vice president for international trade at the National Association of Manufacturers, said China must realize this is a critical time for U.S.-Chinese relations.
“Everything is on pause waiting for these meetings,” Vargo said. “They can move the relationship forward in a positive way. But if nothing comes out of them, that can fan the flames of those in Congress who want to take matters into their own hands.”
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