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Thu, Dec 14, 2006 - Page 10 News List

US-China dialogue commences today

ECONOMIC DIPLOMACY US officials will participate in negotiations with Chinese Vice Premier Wu Yi and also meet with President Hu Jintao and Premier Wen Jiabao

AFP AND AP , BEIJING

Police prepare to destroy pirated CDs and DVDs in Beijing on Saturday ahead of this week's visit by US Treasury Secretary Henry Paulson and other US officials.

PHOTO: AP

A high-powered US delegation was due to converge on China yesterday for landmark talks on economic cooperation but faced mounting pressure back home to wring trade concessions out of their hosts.

Meanwhile, ahead of the visit, US retailer Home Depot Inc signed an agreement yesterday to buy a chain of Chinese home improvement stores and GE Aviation announced a jet engine sale.

The deals were signed at a ceremony attended by US Commerce Secretary Carlos Gutierrez.

Such deals are frequently announced ahead of US-Chinese meetings as Beijing tries to mollify American critics of its soaring trade surplus with the US.

The two-day meeting in Beijing commences a new twice-yearly "strategic economic dialogue."

But the initiative, aimed at heading off future bumps in the bilateral economic relationship, starts amid a host of existing US concerns over China's trade policies.

In a measure of the weight attached to the meeting by Washington, one-third of the 15 US Cabinet secretaries plus other top officials are due in the Chinese capital for the meetings that begin today.

The US delegation's leader, Treasury Secretary Henry Paulson, arrived in Beijing yesterday and will be joined by his fellow secretaries of commerce, labor, energy and health and human services and the head of the US central bank.

The US officials will hold talks with Vice Premier Wu Yi (吳儀) and other Chinese officials, and have an audience with President Hu Jintao (胡錦濤) and Premier Wen Jiabao (溫家寶).

Paulson unveiled the initiative in September as an opportunity for regular communication on trade and energy issues and other challenges attending China's economic rise.

He warned last week that China's economic reforms have not kept pace with its rising influence on world markets, singling out Chinese controls on its yuan currency, which are blamed for boosting Chinese exports and its trade surplus with the US.

"It might be easier for [China] to say `we're in transition, give us more time,' but they're a global economic leader and the rest of the world isn't going to give them a lot more time," Paulson said.

New US data published on Tuesday showed its trade deficit with China grew 6.1 percent to a record US$24.4 billion in October, representing a whopping 41 percent of the total US gap of US$58.9 billion for the month.

The figures also showed China has surpassed Mexico as the US' second-largest trading partner behind Canada and led some US economists to predict the full-year bilateral trade deficit would soar to US$240 billion, up from last year's record US$202 billion.

"Needless to say, that will create some pressure to get things done, especially with a not-so-friendly Democratic Congress about to exert its unhappiness," said Joel Naroff of Naroff Economics in the US.

Meanwhile, China on Wednesday announced a new crackdown on pirated goods, a key source of tension with Washington, ahead of talks with Paulson on currency and other irritants in their thriving trade ties.

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