www.iht.com/articles/2006/02/15/business/yuan.php
BEIJING The United States should ease curbs on high-technology sales if it wants to reduce its trade deficit with China, rather than ratcheting up rhetoric, a senior government economist in Beijing said on Wednesday. Reacting to renewed pressure from Washington, the economist, Chen Wenjing, urged the United States to give up its "Cold War" attitude toward China. Using stern language, the Bush administration said on Tuesday that it would exert more pressure on China to adhere to global free trade rules. But those comments reflected domestic US politics, said Chen, vice president of the Chinese Academy of International Trade and Economic Cooperation, the Commerce Ministry's think-tank. "It's known to all that the United States curbs exports and selectively sells only Boeing aircraft, soybeans and cotton to China, and that is also discriminatory as it doesn't apply the same policy to other countries," he told Reuters. "The United States needs to abandon its discriminatory policy and give up its Cold War mentality by removing the restrictions on high-tech exports to China," he said, referring to a ban intended to deny technology to the Chinese military. In a report on Tuesday, the US trade representative, Rob Portman, did not ask for or threaten any specific sanctions against the Chinese, an omission that will not escape the notice of Democratic and Republican lawmakers who have been calling for the administration to take a far tougher line with China. That report stoked what was already a heated debate about the role that free trade has played in the loss of US manufacturing jobs caused by companies shifting production to lower-cost factories in places like China. At a news conference on Tuesday, Portman registered concern about China's enforcement of intellectual property rights and the lack of openness of its markets to US goods and services, a reference to Chinese restrictions on certain foreign investments and trade in financial and other professional services. Noting that US trade with China "lacks equity, durability and balance in the opportunities it provides," Portman said: "This disparity is due in part to China's failure to honor certain commitments, including its failure to enforce intellectual property rights, its protection and support for certain domestic industries, and its refusal to fulfill certain market opening commitments." The report said Portman's office would establish a chief counsel for China trade enforcement to lead a task force to ensure better compliance by China with rules of the World Trade Organization. The report, which was first disclosed in The Wall Street Journal on Tuesday, also called for coordinating China trade policy with other countries and working more closely with Chinese officials on improving financial, antitrust and agricultural regulations. The steps are far milder than what many lawmakers have asked for. The senators say they may bring their bill up for a vote as early as March. Last summer, the Chinese government allowed the yuan to appreciate against the dollar and float in a narrow band, giving in to pressure from its Western trading partners who have said China's artificially cheap currency gives its goods an unfair advantage. In a statement released Tuesday, the Chinese Embassy in Washington said the yuan had risen to a new high since last summer. It said that further appreciation would be gradual given that it "places priority on promoting balanced international payments this year." Portman's office does not have jurisdiction over the currency.
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