Economic deals not good enough, say China's critics
Ray Cheung in Washington
'Vague assurances' of broadened market access for US financial institutions rarely become reality, lawmakers complain
The agreements reached during the Strategic Economic Dialogue talks between the mainland and the US in Washington this week failed to placate critics in the US Senate, who lashed out at the moves as too little too late.
Many now advocate legislation to force the Bush administration to impose sanctions on Beijing.
'For years we have heard vague assurances of greater market access for American financial institutions, but they rarely seem to become reality from China,' Democratic Senator Charles Schumer, a leading critic of Beijing, said in a statement. 'In addition, there is a glaring omission to the White House press release: an eight-letter word, 'currency'.'
The two-day economic summit ended on Wednesday.
US Secretary Treasury Henry Paulson and Vice-Premier Wu Yi announced new agreements that will lift a ban on new foreign firms and joint-ventures entering the mainland's securities industry and allow overseas banks to offer yuan-denominated credit and debit cards.
Beijing will also raise the maximum limit for approved international investors to purchase domestic Chinese stocks from US$10 billion to US$30 billion.
However, there was no accord on the appreciation of the yuan, although the People's Bank of China did increase the trading band for the currency last week.
Democrat Max Baucus, the chairman of the Senate finance committee, expressed 'deep concern' that the currency issue was not addressed.
While welcoming the agreements, Democratic Senator Chris Dodd said significant discriminatory policies remained that protected the mainland's financial sector from foreign competition, such as restrictions on foreign banks offering full domestic currency services.
'These policies hinder the ability of US firms to compete in China and to expand their market presence among a consumer population in need of financial services, products and expertise,' Senator Dodd said.
The criticism of the financial agreements follows intense negotiations during the dialogue meetings, with Mr Paulson unsuccessfully seeking to persuade Beijing to lift the 25 per cent ceiling on foreign ownership of domestic banks.
At a Senate security and international trade and finance subcommittee session, Democratic Senator Evan Bayh said the financial reforms, and particularly the appreciation of the yuan, were symbolic and moving at a 'glacial' pace and warned that Washington must take action. 'The Chinese don't seem to take us seriously,' he said.
The senators said they would push legislation seeking to impose sanctions on the mainland over the value of the yuan, which they said was undervalued by as much as 40 per cent.
Senator Dodd has asked the US Treasury Department to cite the mainland as a currency manipulator. The designation would allow the US to impose sanctions on imported Chinese goods.
The percentage of the US$836.1 billion US global trade deficit in 2006 accounted for by China, according to AmCham-China: 28%
The percentage of companies in an AmCham-China survey this year who felt the US-China commercial relationship affected their business: 89%