China and US start second round of key economic talks
China and the US began the second round of their ministerial Strategic Economic Dialogue in Washington yesterday with Vice-Premier Wu Yi warning America to put trade protectionism aside or both countries would suffer.
Ms Wu, known for her tough negotiating style, is leading a high-level Chinese delegation to the dialogue, set up with the aim of easing trade tension between the two countries.
In an opening statement for the two-day talks with US Treasury Secretary Henry Paulson and his team, Ms Wu said China and the US should see each other as partners, not rivals.
'Problems and contradictions emerging in the development of China-US trade and economic relations should be taken calmly and handled properly,' she said. 'Politicising trade and economic issues is absolutely unacceptable since it is of no help at all but will make the situation more complicated.'
Mr Paulson said there were critics in the US who were disappointed by Beijing's lack of progress on reforms.
'Americans have many virtues - we are a hard-working, innovative people - but we are also impatient,' Mr Paulson said.
'Even the notion of a 'dialogue' may seem too passive for America's action-oriented ethic. It is up to us, over these two days and in the work that follows, to show that words are precursors to action.'
US officials have said that Mr Paulson would press the Chinese side on the currency issue and even raise the subject of food safety in talks with Ms Wu, recently highlighted by the deaths of pets in the US who ate pet food contaminated with a Chinese-made ingredient.
Ms Wu is scheduled to meet US congressmen today and tomorrow. A meeting with President George W. Bush at the White House has been scheduled for tomorrow. Later in the day, Ms Wu will address American business leaders. She is also expected to meet US House Speaker Nancy Pelosi - a long-time and vocal critic of Beijing.
Last week, policymakers announced a raft of measures to cool the economy and pacify US critics of its currency policy, including widening the band within which the yuan trades. On Monday, it was confirmed Beijing had agreed to buy a US$3 billion stake in US-based private equity firm Blackstone.
The Washington Post reported yesterday Beijing may agree at the talks to lift the limits on foreign ownership of mainland banks. This has been indirectly confirmed by Liu Mingkang , chairman of the China Banking Regulatory Commission, who Bloomberg quoted saying whether the limit would be lifted would depend on the talks. At present, foreign investors are allowed a 25 per cent stake in mainland banks.
Yesterday, Wang Binghua, president of the State Nuclear Power Technology Company, said it was close to completing a deal with Westinghouse Electric, a unit of Toshiba Corp, to acquire four nuclear reactors. Xinhua quoted Mr Wang saying the multibillion-dollar deal would be signed next month.
In Beijing, Foreign Ministry spokeswoman Jiang Yu said Ms Wu would lobby the US Congress on the benefits of trade ties.
'We hope that this will help enhance US Congress members' understanding of China-US trade and economic relations so they can make more constructive contributions,' Ms Jiang said of the planned meetings.
She said China's inexpensive exports were a boon to US consumers. 'China has never pursued a trade surplus. We will continue expanding imports of US goods.'
Shi Yinhong , director of the Centre for American Studies at Renmin University in Beijing, said the US should be careful in pushing China.
Additional reporting by Tom Miller