Hi-tech exports 'central to trade imbalance'
Vice-Premier claims US lost US$70b last year because of restrictions on selling sensitive equipment to mainland
Vice-Premier Wu Yi has said responsibility for resolving America's trade imbalance with the mainland rests on its own shoulders and has urged the loosening of export controls on hi-tech products.
She also defended the pace of yuan appreciation and warned that any sudden adjustments would damage the interests of both countries.
'To simply rely on the Chinese side's hard work is not enough to change the US trade imbalance with China. The US side must also adopt sincere and effective policies,' Ms Wu told business leaders in Washington on Thursday night.
The event was the finale of her four-day US visit, which included the two-day Strategic Economic Dialogue.
Earlier in the day, she met President George W. Bush and members of Congress. In a forceful yet polite speech, Ms Wu urged the US to steer clear of protectionist sentiment and to widen the range of hi-tech products that could be sold to the mainland.
Washington imposes stringent controls on exports of its most-sophisticated products to the mainland for fear that they may have military applications.
Ms Wu said such restrictions had severely limited US exports to the mainland and were partly responsible for the growing US trade deficit, which hit a record US$232.5 billion last year, according to US statistics.
'I believe that if the US adjusts its export controls to China, then US exports would increase significantly,' Ms Wu said.
She said the US share of hi-tech imports to the mainland had dropped from 18.3 per cent in 2001 to only 9.1 per cent last year and that if the US had maintained its 2001 market share last year, US exports to the mainland would have increased by US$70 billion.
Ms Wu also urged the US to solve the problem of issuing visas to Chinese people who wanted to visit to the US, which have become extremely burdensome and time-consuming to obtain since the September 11, 2001, terrorists attacks.
She also defended the pace of currency reform.
'I believe the floating band of the renminbi exchange rate will continue to expand as the market changes in the future,' she said.
'China's exchange rate reform will be advanced in an orderly way, based on the principles of self-initiative, controllability and gradualism.'
In response to growing US criticism, particularly from members of Congress, that the yuan is undervalued by as much as 40 per cent, Ms Wu said 'large-scale yuan appreciation will have a negative impact on China's economy'.
She described in detail the measures Beijing was adopting to address the nation's trade imbalance, such as decreasing tariffs for imports while seeking to limit exports of certain products by increasing taxes and eliminating subsidies.
One issue on which Ms Wu did offer help was resuming US beef exports to the mainland, a topic brought up by Mr Bush during their meeting. Beijing banned imports because of concerns about mad cow disease. 'President Bush discussed the beef issue with me during our meeting. After I return to Beijing, I will talk to my boss and I am sure we find a solution,' she said.