- The Washington Times - Thursday, May 24, 2007

ASSOCIATED PRESS

President Bush told a senior Chinese economics minister yesterday that the United States is “watching very carefully” whether Beijing will strengthen the value of its currency.

After a meeting with Vice Prime Minister Wu Yi, the leader of the largest high-level Chinese delegation ever to visit the United States, Mr. Bush told reporters that the United States is “making it clear to China that we value our relationship, but the $233 billion trade deficit must be addressed.” Strengthening China’s currency, he said, is one way to deal with the deficit.

“This is a complex relationship,” Mr. Bush said. “There’s areas where there’s friction, and we’ve just got to work through the friction.”

A day after high-level economic talks with senior Bush administration officials, Miss Wu planned meetings today with congressional leaders. Discussions yesterday failed to reach a breakthrough in the countries’ biggest dispute: China’s undervalued currency.

Many lawmakers are considering legislation that would punish Beijing for trade practices that they say have driven U.S. trade deficits to record levels and cost thousands of manufacturing jobs.

Zhu Guangyao, assistant Chinese finance minister, told reporters that Miss Wu stressed in her talks with Congress that it would be “inappropriate to use noneconomic means” to solve differences, referring to retaliatory legislation.

Mr. Bush, in his comments, urged China to open up financial markets to U.S. companies.

“Not only would it be beneficial to the United States, we happen to think it would be beneficial to the Chinese economy for the consumers to have different options when it comes to savings and purchases,” Mr. Bush said.

He also called on China to open its market to U.S. beef. “They need to be eating U.S. beef. It’s good for them. They’ll like it,” he said.

China has rejected U.S. requests that it accelerate the revaluing of its currency, the yuan, which American manufacturers contend is undervalued by as much as 40 percent. That makes Chinese products cheaper for Americans and U.S. goods more expensive in China.

After meetings yesterday between lawmakers and Miss Wu, Ways and Means Committee Chairman Rep. Charles B. Rangel, New York Democrat, said the Chinese told lawmakers they needed more time to overhaul their currency system and make other changes.

Mr. Rangel told reporters that his committee planned to move forward with legislation; some of the bills being considered would impose stiff penalties on Chinese imports.

Sen. Charles E. Schumer, New York Democrat, a leading critic of China, described the frustration he said his colleagues felt. “There’s never any action,” he said in an interview. “I don’t think a press release is going to assuage Congress’ worries. We need results.”

Despite the criticism, both Miss Wu and Treasury Secretary Henry M. Paulson Jr., head of the U.S. delegation at the talks, sounded positive about the importance of the new high-level “strategic economic dialogue” between the countries, which occurs twice a year.

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