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US to meet China in Washington to tackle thorny issues | |
(about 14 hours later) | |
By Caroline Hepker BBC World Business Report | By Caroline Hepker BBC World Business Report |
Top US and Chinese officials will be meeting for two days in Washington, starting this Monday. | Top US and Chinese officials will be meeting for two days in Washington, starting this Monday. |
The heads of 16 US government agencies and representatives from 20 Chinese government departments will discuss the most difficult issues in a complex, interdependent relationship. | The heads of 16 US government agencies and representatives from 20 Chinese government departments will discuss the most difficult issues in a complex, interdependent relationship. |
The annual Strategic and Economic Dialogue comes just four months after bilateral discussions between President Barack Obama and President Hu Jintao. | The annual Strategic and Economic Dialogue comes just four months after bilateral discussions between President Barack Obama and President Hu Jintao. |
It is not thought any concrete results will emerge from this meeting - rather, each side is hoping to influence the other's point of view. | It is not thought any concrete results will emerge from this meeting - rather, each side is hoping to influence the other's point of view. |
That has meant a string of statements and briefings on issues from the yuan exchange rate to protectionism, America's budget deficit and China's human rights record from leaders on both sides. | That has meant a string of statements and briefings on issues from the yuan exchange rate to protectionism, America's budget deficit and China's human rights record from leaders on both sides. |
Perhaps the most influential business group in America, the US Chamber of Commerce, says it is most worried about reduced access for American businesses to China's vast market. | Perhaps the most influential business group in America, the US Chamber of Commerce, says it is most worried about reduced access for American businesses to China's vast market. |
According to Myron Brilliant, senior vice-president for international affairs: "It is more difficult to do business in China than it was five years ago." | According to Myron Brilliant, senior vice-president for international affairs: "It is more difficult to do business in China than it was five years ago." |
In particular, the chamber says China's "indigenous innovation" policy tilts the playing-field in favour of Chinese firms, and hurts American businesses. | In particular, the chamber says China's "indigenous innovation" policy tilts the playing-field in favour of Chinese firms, and hurts American businesses. |
US Commerce Secretary Gary Locke said ahead of the US-Chinese meeting that US firms in China "are frequently shut out of sectors or forced to share their technology to gain market access". | US Commerce Secretary Gary Locke said ahead of the US-Chinese meeting that US firms in China "are frequently shut out of sectors or forced to share their technology to gain market access". |
Chinese wall? | |
But China makes its own claims of discrimination. Beijing argues the US imposes restrictions on Chinese investment in the US using the cloak of national security concerns. | But China makes its own claims of discrimination. Beijing argues the US imposes restrictions on Chinese investment in the US using the cloak of national security concerns. |
China expert Professor Shang-Jin Wei, of Columbia University in New York, says both countries are more open to trade and investment than the rest of the world. | China expert Professor Shang-Jin Wei, of Columbia University in New York, says both countries are more open to trade and investment than the rest of the world. |
But sizeable disagreements over important issues remain. | But sizeable disagreements over important issues remain. |
US Treasury Secretary Timothy Geithner will be co-chairing the economic talks with China's Vice Premier Wang Qishan, while Secretary of State Hillary Clinton and State Councillor Dai Bingguo will head the strategic dialogue. | US Treasury Secretary Timothy Geithner will be co-chairing the economic talks with China's Vice Premier Wang Qishan, while Secretary of State Hillary Clinton and State Councillor Dai Bingguo will head the strategic dialogue. |
Mr Geithner has said he will press China again on its currency policy, an issue of persistent friction between the world's two biggest economies. | Mr Geithner has said he will press China again on its currency policy, an issue of persistent friction between the world's two biggest economies. |
The Chinese have retorted they are adamant that pleas to raise the value of the yuan will be of little use. | The Chinese have retorted they are adamant that pleas to raise the value of the yuan will be of little use. |
Chinese Vice Finance Minister Zhu Guangyao said in a briefing ahead of these talks that both countries agreed on the direction of yuan reform, even if they disagreed on the pace of change. | Chinese Vice Finance Minister Zhu Guangyao said in a briefing ahead of these talks that both countries agreed on the direction of yuan reform, even if they disagreed on the pace of change. |
America has complained for years that China keeps its currency artificially low, to help Chinese exporters. | America has complained for years that China keeps its currency artificially low, to help Chinese exporters. |
Many US lawmakers believe the yuan is undervalued by 15% to 40%. | Many US lawmakers believe the yuan is undervalued by 15% to 40%. |
The yuan has now risen in value by about 5% since June. | The yuan has now risen in value by about 5% since June. |
Trade issues | |
But the US wants the Chinese currency to increase further, not least because of the worrying trade gap between the two nations. | But the US wants the Chinese currency to increase further, not least because of the worrying trade gap between the two nations. |
On the other hand, China has its sights set on America's huge budget deficit. | On the other hand, China has its sights set on America's huge budget deficit. |
China is America's biggest lender and Beijing has asked Washington on numerous occasions to offer assurances about government debt levels and the strength of the dollar. | China is America's biggest lender and Beijing has asked Washington on numerous occasions to offer assurances about government debt levels and the strength of the dollar. |
The federal deficit in America is expected to hit a staggering $1.4 trillion this year. | The federal deficit in America is expected to hit a staggering $1.4 trillion this year. |
That is a serious concern to governments like China that invest heavily in US Treasury bonds and other dollar assets. | That is a serious concern to governments like China that invest heavily in US Treasury bonds and other dollar assets. |
Finally, talks will not just be about business. | Finally, talks will not just be about business. |
The Obama administration says it will raise China's human rights record at this event following recent bilateral talks that produced no tangible results. | The Obama administration says it will raise China's human rights record at this event following recent bilateral talks that produced no tangible results. |
Critics have argued the treatment of dissidents and individual rights in China has been lost amidst the trade and business talk. | Critics have argued the treatment of dissidents and individual rights in China has been lost amidst the trade and business talk. |
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