- The Washington Times - Sunday, November 12, 2006

Commerce Secretary Carlos Gutierrez today begins a weeklong trade mission to China aimed at expanding U.S. exports in the face of a mushrooming trade deficit with the communist nation.

The U.S. delegation, which includes representatives from 25 companies, hopes to increase the level of U.S. exports and expand into new areas of China.

Members arrived yesterday in Beijing and planned to travel Wednesday to Shanghai before wrapping up the mission Friday.

China is the world’s fastest-growing market. With $243 billion in U.S. trade last year, it is the fourth-largest U.S. export market.

U.S. exports grew about 20 percent last year and are growing at a rate of about 34 percent this year “and we want to strike while it’s hot,” Mr. Gutierrez said last week.

“The fact that we’re up 34 percent, on top of a year we were up 20 [percent], it says that our businesses have unlocked China in many ways and they’re doing well, they’re understanding the marketplace.

“We want to grow on top of that growth,” he added.

Despite growing exports, the U.S. trade deficit with China reached $23 billion in September, the Commerce Department reported Thursday, and is likely to surpass last year’s $202 billion, a record for a bilateral deficit.

China’s politically sensitive trade surplus with all countries should soar to a record $150 billion this year, nearly 50 percent above the 2005 level of $102 billion, according to Chinese Commerce Ministry figures reported Friday by a state news agency.

The figures were the government’s highest projection so far for the mounting trade gap, which has fueled concern in the U.S. and with other trading partners. They want China to open its markets wider to imports and ease controls that they say keep its currency weak, giving its exporters an unfair price advantage.

Given China’s economic growth, U.S. companies could increase business in areas such as pharmaceuticals, manufacturing, health care, tourism and direct sales to consumers — through retail stores and door-to-door sales, Mr. Gutierrez said.

Massive construction in China also should offer opportunities for U.S. companies. The roster of companies accompanying Mr. Gutierrez includes those in such areas as heavy equipment, architecture, engineering and construction.

Companies participating include the Home Depot, Oshkosh Truck Corp., Eli Lilly and Co., Lucent Technologies, McGraw-Hill Cos. and Westinghouse Electric Co.

Mr. Gutierrez also said he wanted to see the effectiveness of a Chinese requirement that personal computer manufacturers include anti-piracy software in their equipment.

“I’m very curious to see how this pre-installed software’s going. That’s probably the single biggest agreement and step forward that they could make and I want to see it firsthand,” he said.

Mr. Gutierrez said 90 percent of software sold in China is pirated.

The trade mission is “well-timed,” said Jay M. Tannon, a lawyer with broad China experience who works at the firm DLA Piper.

Although exports are expanding, “we have a serious trade imbalance and it’s important that the U.S. government does what it can to help U.S. companies expand their position in the Chinese market,” he said.

“Clearly, with the growth of the Chinese economy at 10-plus percent a year, and the strengthening of consumer demand in China, there’s a lot of reason to believe we can expand our exports there,” he said.

Leslie M. Schweitzer, a senior trade adviser with the U.S. Chamber of Commerce, also lauded the mission.

“Anything that gives some visibility that business is doing well and that business is prospering, that’s a message that we need to send to members of Congress, saying that it’s not just the Fortune 100 that are prospering in China,” she said.

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