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Bush faces mounting pressure to get tougher on China

The US and China may have secured a hard-fought deal on textiles, but President George W. Bush still has a battery of complaints to level on the trade front when he visits Beijing next weekend.

Bush, who heads to the Chinese capital Saturday as part of an Asian tour, is facing mounting pressure from US lawmakers for his administration to get tough over trade.

Figures out last week showed the depth of Washington's problem, with the US trade deficit exploding to a new record high of US$66.1 billion in September.

Nearly one-third of that was accounted for by the US deficit with China alone.

For many here, China is guilty of manipulating its currency rate to boost its exports, of turning a blind eye to a rampant trade in fake goods, and of shutting out US firms eager to enter the country's huge domestic markets.

The two nations removed one major trade headache in advance of Bush's trip by reaching an agreement last week to regulate Chinese textile exports to the US, giving US manufacturers a breathing space from fierce Chinese competition.

But the US president is adamant that China needs to progress on other commercial fronts, according to national security adviser Stephen Hadley.

Bush will tell his hosts that "progress on intellectual property rights, currency reform, and market opening are good for our companies but they are equally good and important for China's own future prosperity," Hadley said.

Hadley pointed to Beijing's modest step in July towards letting markets decide the value of the yuan, and said there had been "very little since."

Last Wednesday, a Congressional commission called for trade sanctions against China as part of an aggressive policy response if Beijing does not adopt a more flexible currency regime to curb its rapid export growth.

Democratic Senator Byron Dorgan, a trenchant critic of China, said the mushrooming trade deficit demanded urgent action.

"All of the American workers fired, all the jobs in China. Why? Because you can pay 30 cents an hour and work them seven days a week" in China, he said.

"We have a one-way trade relationship with China. Will the president raise these questions? Not likely," he said.

By some measures, China's economy, as adjusted for purchasing power parity, is on course to overtake the US economy as the world's biggest in a little over a decade.
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