Top Biz News

Trade deals reflect resolve to cut surplus

By Dai Yan (China Daily)
Updated: 2006-04-13 05:43

Major commercial deals China has signed with the United States reflect its sincerity to reduce the huge trade surplus, Vice-Premier Wu Yi said in Washington on Tuesday after fruitful high-level negotiations.

Wu, who is heading a 200-strong delegation of business people, told a press conference that Chinese companies had signed 107 contracts with US firms worth US$16.2 billion.

The agreements cover sectors ranging from airplanes, electronics, auto parts, heavy equipment and software to cotton and soybeans.

Chinese airlines will buy 80 next-generation Boeing 737 planes, valued at US$4.6 billion, in addition to the 70 Boeing 737s ordered in November during US President George W. Bush's visit to Beijing.

The latest agreements were signed at the conclusion of the annual US-China Joint Commission on Commerce and Trade (JCCT) meeting in Washington.

The talks on Tuesday were attended by Wu, US Commerce Secretary Carlos Gutierrez and Trade Representative Rob Portman, both of whom praised China for its commitments.

"In our discussions today, which were very frank and positive, we were able to solve some problems," Portman said at a joint news conference.

To ease trade frictions with the United States, China promised at the meeting that it would reopen its market to US beef, reduce piracy of American goods and begin talks by the end of next year to open its huge government procurement market to foreign firms.

Beef imports were suspended in December 2003 after mad-cow disease was found in Washington state. Other countries including South Korea and Japan have also banned US beef imports since then. China bought US$28.4 million worth of US beef in 2003.

On copyright piracy, China requires all computers sold in the country be loaded with legal operating software and to increase enforcement efforts against all forms of copyright piracy.

China also made commitments to streamline the sale approval of American medical devices; to adjust capital requirements that American telecommunications companies see as a major barrier to setting up Chinese operations; and to make sure new rules do not discriminate against US express delivery firms.

Wu reiterated that the United States could also help itself by lifting security restrictions on exports of high technology to China. At the JCCT talks, Washington agreed to explore that issue through top-level talks.

The large purchases in the United States could not fully eradicate the trade deficit, but they delivered a very important message to the US Congress, the public and the media, said Zhou Shijian, a researcher with the Institute of American Studies under the Chinese Academy of Social Sciences. "It shows the sincerity and goodwill of the Chinese Government and enterprises to redress the bilateral trade imbalance," Zhou said.

US-China Business Council President John Frisbie welcomed the outcome of the JCCT talks.

"A comprehensive, step-by-step approach that includes carrots, not only sticks, to develop mutually beneficial trade ties and resolve differences is the best way for the United States and China to make measurable, lasting progress in the commercial relationship," he said.

The US Commerce Department announced yesterday that the bilateral trade gap with China shrank 22.7 per cent in February as the country's deficit narrowed 4.1 per cent to US$65.7 billion.

The trade deficit with China narrowed significantly to US$13.8 billion the lowest level since March 2005 reflecting a 16.2 per cent drop in imports and a 17 per cent rise in exports, it said.

(China Daily 04/13/2006 page1)