By Andrew Beatty (AFP) – Jan 19, 2011
WASHINGTON — The United States and China have announced a raft of trade deals worth $45 billion, as the two powers tried to narrow disputes by tethering their economic fortunes.
Lauding 70 trade agreements with exporters in 12 US states, presidents Barack Obama and Hu Jintao edged away from the fevered rhetoric of recent months to stress mutual dependency, despite lingering tensions.
Obama expressed hope for a renewal of relations, casting aside "old stereotypes" and allowing US firms to more easily benefit from China's breakneck development.
"I absolutely believe that China's peaceful rise is good for the world and it's good for America," he in insisted.
Facing domestic suspicions that China has rode roughshod over trade rules and over US manufacturers, Obama stressed the package, worth $45 billion dollars to US exporters, would support 235,000 US jobs.
But Obama also insisted on a "level playing field" for US companies, hinting at disputes that have emerged as China's economic clout has grown.
He also renewed calls for the yuan to strengthen against the dollar -- a move that would curb artificially low prices for Chinese exports. Hu stopped short of supporting that call, but stated that China would focus more on domestic-led growth.
While foreign leaders frequently bring a fistful of trade agreements to Washington, the scope of Wednesday's deals pointed to rapidly deepening business links between the United States and its emerging rival.
"It's par for the course, but it is very important given the political context between China and the United States," said Yukon Huang, an Asia expert with the Carnegie Endowment for International Peace commenting on the agreements.
"The trade imbalance and frictions in terms of jobs and market access are the biggest concerns for both sides right now. Both sides are trying to stress the common ground."
Chinese businesses have descended on the United States to coincide with Hu's visit, inking agreements with US titans Alcoa, General Electric, Honeywell, Westinghouse and Caterpillar among others.
The deals span sectors as diverse as agriculture, gasification, railways and hybrid buses.
"These will inject fresh momentum into our bilateral cooperation," Hu said.
But the deals come in stark contrast to the trade spats that have complicated relations in recent years, when US officials have appeared increasingly exasperated that cheap Chinese products are flooding the US market.
Washington has frequently challenged China at the World Trade Organization and complained that Beijing's currency policies have cost US jobs and risked dangerous imbalances in the global economy.
The meeting did touch on US complaints that China does not adequately protect copyright and unfairly discriminates against foreign firms in competitions for lucrative government contracts.
Obama announced steps toward resolving each of those issues.
Hu was said to have agreed to make it easier for US firms to tap government procurement contracts beyond the central government.
Chinese "sub-central" government bodies are said to procure more than the $88 billion committed by Beijing each year.
"I welcomed his commitment that American companies will not be discriminated against when they compete for Chinese government procurement contracts," Obama said, referring to the Chinese leader.
He also welcomed promises to curb the theft of intellectual property.
According to Huang, Hu's promises are a "positive step," but they come after several false starts.
"Implementation is another issue because actually procurement is done by corporations and provinces, it is decentralized -- you cannot control every contract," Huang said.
"Whether (the promise) is substantive depends on how the tone permeates through the bureaucracies on both sides."
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