Trade disputes may mar China PM's US visit

Chinese Prime Minister Wen Jiabao is in the US to hold historic talks with President George Bush as economic disputes threaten to undermine a new mood of co-operation in Sino-US relations.

    Kofi Annan and Prime minister Wen Jiabao held talks at the UN

    The beaming Chinese premier rang the opening bell at the New York Stock Exchange, setting the tone for a visit where trade and economic relations are high on the agenda.

    He visited Ground Zero, the site of the World Trade Center towers devastated in the September 11 attacks two years ago, ahead of a keynote speech to another bastion of US capitalism, the American Bankers Association.


    Wen Jiabao is heading a high-powered delegation that includes Ma Kai, head of the State Development and Reform Commission, and Deputy Commerce Minister Ma Xiuhong.

    Washington's unease with China's growing trade surplus with the US will lead the agenda when both leaders meet for talks at the Oval office on Tuesday.

    Bush is ready to cap Chinese
    imports to cut trade deficit

    The US says that China's currency linked to the dollar has aggravated the trade surplus in China's favour. The US wants the yuan to be separated to create a level playing field in the trade market.

    Washington warned last month that it was ready to cap imports of certain Chinese dressing gowns, knit fabrics and bras, sparking fierce protests from Beijing. Bush will also demand more action from China on piracy of US software and violation of intellectual property rights.

    A senior US government administration official told reporters that Bush would push for greater access to China's markets. "It is a market which we continue to believe is not as open to our exports as the US market is open to Chinese exports."


    Mai Kai told reporters that China's 2002 surplus with the United States was $42.1 billion. He stressed that China was running a deficit of its own with Japan, South Korea, Taiwan and other Asian nations, totaling around $53.7 billion.

    "If we use the balance of international payments as a measure for whether a currency should appreciate or devalue, we should not just look at bilateral trade situations but at the multilateral trade situation," Ma Kai said.

    The Deputy Commerce Minister Ma Xiuhong denied that US  jobs were being lost because of imports of cheap Chinese products.

    "Most export commodities from China to the United States are no longer produced in this country or are produced in a high-end way. So most Chinese exports to the United States do not pose a threat to industry here."


    Asides from discussion on the economy, Wen is expected to seek assurances on Tuesday from the Bush administration that Washington will rein in Taiwan. The island has angered China with suggestions that it might want to push for independence through a series of referendums, formalizing a 54-year division from the mainland.

    The United States is Taiwan's main weapons supplier and has pledged to help defend it if China attacks.
    On arrival in New York on Sunday, Wen said China understood the Taiwanese people's aspiration for democracy. "The essence

    of the problem now is that the separatist forces
    within the Taiwan authorities attempt to use democracy only as a cover to split Taiwan away from China, and this is what we will never tolerate," Wen said.

    Korean crisis

    The Chinese Premier met UN Secretary General Kofi Annan on Sunday. Later he told reporters of "progress" in efforts by North Korea and the United States to peacefully resolve the Korean peninsula's latest nuclear crisis. 
    North Korea pulled out of the nuclear Non-Proliferation Treaty in January and kicked out international monitors before relaunching its nuclear reactors.
    However, Wen highlighted Pyongyang's stated desire for a nuclear-weapons-free Korean peninsula, and US assertions that it has no intention of changing the government in Pyongyang. "The positions of the two parties are getting closer," he said.



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