Official: China-US economic ties far beyond trade problem

17:12, December 17, 2010      

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It is a misperception to focus on the U.S. trade deficit and downplay the huge common interests in the "extremely extensive" China-U.S. economic relations, said a senior Chinese official for commerce.

Yao Jian, spokesperson for the Ministry of Commerce, said on Wednesday in Beijing that the hand-wringing among some American political figures over the value of Chinese currency yuan is misplaced as a result of their misunderstanding of China-U.S. economic relations. Trade, as Yao described, is no more than "the tip of the iceberg" in the much bigger picture of the China-U.S. economic relations.

The interests of the world's two large economies are "complementary," rather than conflicting, to each other, Yao stressed. China has a strong manufacturing industry, while the U.S. is much stronger than China in terms of services.

Given that, targeting Chinese exports to the United States does not help the U.S. economy or employment. The World Trade Organization, or WTO, has recently supported the U.S. punitive tariffs imposed on tires from China.

In a statement responding to the WTO ruling, the Ministry of Commerce of China pointed out that the U.S. taxes on Chinese tires have only reduced its imports of such tires from China, but expanded its imports from other markets.

In addition, despite the trade remedy measures against China, the employment in the U.S. tire manufacturing sector declined by 10 percent year on year in the first five months of the year, while more jobs in the tire wholesaling sector were lost. Also partly as a result of the duties, American consumers will have to pay at least 10 percent to 20 percent more for tires now that the prices have increased.

"Our experts are reviewing the WTO documents, and we will appeal after that," said Yao, criticizing the U.S. measures against Chinese tires as "in the interest of neither China nor the U.S."

The real solution to the issue of U.S. trade deficit with China is to go far beyond the trade and exploit the great potential in the various aspects of the China-U.S. economic relations. That means, according to Yao, more cooperation on service sector, finance, fiscal and investment.

He also urged the United States to "fairly" treat Chinese investment now that Chinese investment in the United States is growing.

The market economy status is also an important, but pending issue in the China-U.S. relations. China is vulnerable to trade measures against its exports when its trade partners, including the U.S., refuse to grant China the status. Yao called for the U.S. to solve this problem as early as possible.

An action that can be taken sooner is probably the easing of U.S. restrictions on hi-tech exports. The Obama administration has initiated the review of the export restriction catalogue to boost its exports. It is expected that the review could result in the restrictions being relaxed.

"How could we talk about trade balance when there are so many export controls on the U.S. side?" Yao said.

He also hopes that the United States could further clarify its Sanitary and Phytosanitary (SPS) quarantine standards as China's exports of fruits and poultry have been increasing.

Over the first 11 months of the year, the bilateral trade between China and the United States rose by 30 percent to 347 billion U.S. dollars. That growth is 6 percentage points lower than the growth of China's total foreign trade in that period. According to the statistics on the Chinese side, from January to November, China had a surplus of 167 billion U.S. dollars in the trade with the United States, its second largest trading partner.

By Li Jia, People’s Daily Online
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