U.S. fails to move China on yuan

High-level talks achieve some agreements but no progress on currency

May 24, 2007|By Cox News Service

WASHINGTON -- After two days of talks, the United States and China reached several economic agreements yesterday, including one to substantially increase passenger and cargo flights between the two trading partners.

But officials failed to make progress on the hottest topic: currency policy.

Many U.S. business owners and workers believe China intentionally holds down the value of the yuan as much as 40 percent to make Chinese goods cheaper in the global marketplace.

They have been demanding that Congress impose trade sanctions unless China allows its currency to rise in value.

The U.S. delegation of Cabinet officials, led by Treasury Secretary Henry M. Paulson Jr., met with their Chinese counterparts to discuss several contentious issues.

The U.S. goal was to prod the Chinese to significantly reform their policies on currency values, copyright protections, subsidized industries, aviation agreements and more.

The talks did produce some results, particularly for air carriers.

Under the agreement, U.S. carriers will be able to operate 23 daily round-trip flights to China by 2012, up from 10 this year.

In addition, the United States will be able to designate three additional airlines to fly to China.

"Piece by piece, we are making it easier, cheaper, and more convenient to fly people and ship goods between our two countries," Transportation Secretary Mary E. Peters said at a news conference concluding the second round of the U.S.-China Strategic Economic Dialogue, which began in December in Beijing.

The aviation agreement also allows U.S. air freight companies "virtually unfettered access" to Chinese markets by 2011.

UPS, which is building a hub in Shanghai, applauded the agreement.

"We've been in China for quite some time, and we're certainly looking to expand further," said Malcolm Berkley, a spokesman for the huge delivery service, which has its headquarters in Atlanta.

Although Paulson could point to no breakthroughs on currency, he spoke optimistically about U.S.-Chinese relations as he tried to head off congressional action.

Sanctions feared

The Bush administration fears sanctions could trigger a damaging trade war with China.

"While we have much more work to do, we have tangible results for our efforts thus far," Paulson said.

"These results are like signposts on the long-term strategic road, building confidence and encouraging us to continue moving forward together."

China's Vice Premier Wu Yi was far more upbeat, saying through an interpreter that the gathering was "a complete success."

Such assessments angered Kevin L. Kearns, president of the U.S. Business and Industry Council, representing small and medium-sized manufacturers.

The talks were nothing but a "cynical Bush administration exercise in spin and PR," Kearns said in a statement. He urged Congress to pass legislation to stop Beijing's "predatory trade policies."

Food safety

Agriculture Secretary Mike Johanns said U.S. officials raised questions about food safety in light of recent reports about tainted Chinese foods and drugs.

He did not announce any breakthroughs, but said more meetings would be held on the issue.

Under agreements announced yesterday:

China agreed to lift a prohibition on brokerage joint ventures and allow foreign banks to offer credit cards.

That should help China develop a more consumer-based economy, which would increase imports from the United States.

China agreed to allow foreign insurance firms to offer more products there.

The two countries will cooperate on demonstration projects for capturing methane at coal mines, and will develop "clean coal" technologies.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.