Friday, June 20, 2008

China Pledges Economic Openness, Wants US to Avoid Protectionism

China vice premier pledges economic openness, urges US to avoid protectionism.

China's vice premier said Thursday his country will continue to open its economy, but he urged the United States to avoid protectionism and share technology on energy and climate change.

"A trend of protectionism has emerged in the United States, a country based on free trade," Wang Qishan said at a reception in New York. "The United States should not close its doors or practice protectionism. The U.S. should continue to be an open country."

Wang's comments followed high-level economic talks this week in which China and the United States pledged greater cooperation to boost bilateral investment and deal with energy shortages and climate change.

The two countries agreed to launch talks on a treaty that could allow more U.S. investment in China's booming economy -- a major initiative of the Bush administration. The agreements on energy, the environment and investment followed two days of talks aimed at diffusing simmering economic tensions.

Critics contend the soaring U.S. trade deficit with China, which last year reached an all-time high of $256 billion, is the result of unfair trade practices, including currency manipulation, and has contributed to the loss of 3 million manufacturing jobs since 2001.

Wang said his country would continue down the path of economic reform, noting recent efforts to strengthen intellectual property rights, boost food and product safety, and protect foreign investors. But he urged patience as the developing Asian country of 1.3 billion people seeks to modernize its economy, poised to surpass Germany to become the world's third largest after the U.S. and Japan.

"We are making efforts to build institutions and a sound legal framework," said Wang, a former mayor of the Chinese capital, Beijing. "There is still much room for improvement," he added. "We need to improve transparency, but (the U.S.) should recognize how much progress China has made. We have done in 30 years what it took America 100 years to do.

Wang spoke at a dinner reception at a posh New York hotel. Guests included former U.S. Secretary of State Henry Kissinger, former U.S. ambassador to the United Nations, Richard Holbrooke, and Morgan Stanley Chief Executive John Mack.

Calling U.S.-Chinese relations of "paramount importance," Wang urged the United States to share more technology to prevent climate change and boost energy efficiency. He noted China could use U.S. expertise to capture carbon emissions from coal-fired power plants -- a chief source of global pollution. "This area of capturing carbon emissions enjoys broad prospects and wonderful business opportunities," Wang said.

He noted that U.S. firms have been reluctant to share technology with China because of lax intellectual property laws, but he said he pledged to work on the problem in talks with Treasury Secretary Henry Paulson. The talks were the fourth round of a series of negotiations known as the Strategic Economic Dialogue.

Wang also hit out at U.S. critics who have blamed China for steep increases in world food prices, saying the complaints contradict U.S. trade policy to boost American food sales to China. "Some people say China and India are beginning to eat too much beef and are straining supplies. But India doesn't eat as much beef so it must be all China," Wang said jokingly. "Does that mean the Chinese and Indians are destined to eat rice and vegetables? Some of these problems contradict one another."

The decision to pursue an investment treaty with China offers the prospect of wiping away a multitude of barriers that U.S. companies now face in their efforts to do business with China. But critics of the U.S. trade policy say the process could become bogged down and fail to produce the market-opening that U.S. companies are seeking. Some also complain the measures fail to push the Chinese to stop manipulating its currency.

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