A slowdown in reforms in China could hurt ties with the US, Washington's chief trade negotiator has warned ahead of a visit to Beijing to be led by US Treasury Secretary Henry Pauslon.
US Trade Representative Susan Schwab said in a Financial Times opinion piece yesterday that the Chinese market remained a tough challenge for foreign companies even five years after China joined the WTO.
"Looking back on the past year, we see troubling indications that China's momentum towards reform has begun to slow," she wrote.
PHOTO: AP
"We will clearly convey our view that a slowdown in reform hinders China's development and undermines the health of our bilateral ties," she said.
Schwab will visit China later this week as part of a high-powered delegation comprising Paulson, US Federal Reserve Chairman Ben Bernanke, Commerce Secretary Carlos Gutierrez and Energy Secretary Sam Bodman.
"Voices in China opposing further market liberalization have grown louder and government intervention in the economy, especially at the provincial level, has increased," Schwab said.
US companies face fewer blanket prohibitions or prohibitive tariffs but instead have to cope with "an array of regulatory obstacles and government policies that make doing business in China uncertain," she said.
She criticized "industrial policies that limit imports of goods, government subsidies that encourage exports and protect non-competitive industries, and regulatory barriers that impede participation in China's market by US service providers."
Schwab mentioned sectors from steel to telecommunications, where "massive distortions" exist, and said that for agricultural products, China is "one of the world's least transparent and predictable markets."
US lawmakers say Beijing's exchange rate tethers are fueling the US bilateral trade deficit with China, likely this year to pass last year's record US$202 billion.
But in a volley of official commentaries and statements yesterday, Chinese officials championed their trade policies, citing praise from the WTO's top official, Pascal Lamy.
"China has shown the bearing of a responsible great power, and the WTO Director-General Lamy has awarded it a top grade of A-plus," said the People's Daily, the official mouthpiece of China's ruling Communist Party.
The official China Daily yesterday also defended that "five years into its membership of the WTO, China is fully justified to take pride in its stellar performance as an increasingly important growth engine for the global economy."
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