China Trade Talks Come to Washington
Tuesday, May 22, 2007SUSIE GHARIB: Chinese leaders are in Washington tonight for a new round of economic and trade talks. The so-called strategic economic dialogue will take place over the next two days, at a time of friction over the U.S.'s huge trade deficit with China and the slow pace of Chinese currency reform. But as Stephanie Dhue reports, analysts are doubtful that the high-level talks will produce long-term solutions.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Meeting with China's Vice Premiere Wu Yi, Treasury Secretary Henry Paulson described the talks as a process to ease trade tensions. He called on the Chinese to make sure that process leads to action.
HENRY PAULSON, TREASURY SECRETARY: Our policy disagreements are not about the direction of change, but about the pace of change. Americans have many virtues. We are hard-working, innovative people, but we are also impatient.
DHUE: China is under increasing pressure to make policy changes. The Commerce Department is putting tariffs on Chinese government-subsidized paper imports. The U.S. trade representative is cracking down on the piracy of DVDs, and U.S. lawmakers have threatened legislation if China doesn't re-value its currency. But China's vice premiere, Wu Yi, made clear her country won't be backed into a corner.
TRANSLATION OF: VICE PREMIER WU YI, CHINA: Economic and trade issues can only be correctly approached and addressed according to economic law. Politicizing economic and trade issues is absolutely unacceptable, since it is of no help at all, but will make the situation even more complicated.
DHUE: Ahead of the talks, China announced it would widen the trading band for its currency, the yuan. It also moved to diversify out of U.S. Treasuries, with a $3 billion investment in the Blackstone Group. And it has agreed to purchase more than $4 billion worth of software, semiconductors, and telecommunications equipment from U.S. companies. But lawmakers are unimpressed. Representative Randy Forbes co-chairs the congressional China caucus.
REP. RANDY FORBES (R) VIRGINIA: My biggest fear is that we'll see legislation just out of frustration. But that could be knee-jerk legislation that comes out or it could be just a part, instead of the overall tapestry that we need to have an effective policy when it comes to dealing with China.
DHUE: The administration stresses that these talks aren't aimed at any specific trade deal. Instead, they are meant to broaden each sides' understanding of the issue. But clearly many members of Congress are eager for more. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.
