High-level US team lands slim pickings
United States Secretary of Commerce Carlos Gutierrez unveiled a disappointingly small trade gift basket from the mainland at a ceremony in Beijing last night, serving mostly to highlight the large and growing trade imbalance between the two countries.
Four deals were signed, including the acquisition by US home improvement retailer Home Depot of Chinese copycat operation Home Way, a US$550 million aircraft engine deal between Shanghai Airlines and General Electric Aviation, an agreement between internet security firm VeriSign, the Ministry of Information Industry and China Netcom to launch a domain name service and the purchase from Oshkosh Truck Corp of a solitary fire engine by Quzhou Airport.
The Shanghai Airlines purchase from GE is actually part of an acquisition earlier this year of nine Boeing 787 Dreamliner aircraft.
In recent years it has become customary for Chinese companies to make large-ticket purchases of American products during political visits to underscore the mainland's commitment to tackling its bilateral and global surpluses.
'China's emergence as a big exporter of sophisticated capital equipment has made it difficult for the US to find big headline deals [apart from] aircraft that they can unveil on these occasions,' ING chief regional economist Tim Condon said.
Mr Gutierrez is in Beijing as part of a high-powered delegation led by Secretary of the Treasury Henry Paulson and Federal Reserve chairman Ben Bernanke. They will meet Chinese ministers and officials today and tomorrow in the first of regular 'strategic dialogue' initiated in September by Mr Paulson, a former Goldman Sachs head who has a close working relationship with the mainland authorities.
'China needs to do more to open its markets, protect intellectual property and implement economic reforms,' Mr Gutierrez said yesterday.
Home Depot's acquisition of 100 per cent of Home Way, a spitting image of the American giant right down to its logo and orange employee aprons, marks the retailer's first foray into a market that is estimated at US$50 billion and growing 20 per cent a year.
The deal gives Home Depot 12 stores in six mainland cities.