BEIJING (AFP) — A week of senior Sino-US economic exchanges kicked off on Monday with China warning the United States not to push too hard on sensitive issues, amid long-standing tensions over the Chinese currency.
However China also said it would triple the quota for foreign stock investment, in a gesture analysts said was meant to create the appearance ahead of the Strategic Economic Dialogue that it was moving on areas of US concern.
"We should avoid unreasonably and unilaterally blaming the other side," Vice Commerce Minister Chen Deming was quoted as saying in the English-language China Daily, which mainly targets a foreign audience.
He warned that a trend for Americans to politicise trade issues could escalate as next year's presidential election approached, according to the paper.
Chinese Finance Minister Xie Xuren also cautioned that bilateral relations would suffer if bills before US Congress concerning trade ties between the two sides were passed.
"If some legislative bills currently before US Congress are passed, they will cause serious harm to China-US economic and trade cooperation and to the interests of the US itself," the official Xinhua news agency said on Sunday, quoting Xie.
The statements came as the two sides braced for a series of high-level meetings in and near Beijing, where the US envoys were likely to focus on the Chinese currency, which they criticise as being severely undervalued.
This gives China's exporters an unfair advantage and is a big reason behind the massive trade imbalance between the two nations, US critics charge.
China has consistently maintained that it will loosen controls on the yuan at a pace of its choosing, and not because of demands from the United States.
The US delegation, led by Treasury Secretary Henry Paulson, is also expected to voice concerns that China is tightening restrictions on foreign investment to protect domestic industries.
"China cannot protect its way to prosperity -- protectionism harms China's industrial development and our efforts to build stronger trading relationships," Paulson said prior to his departure.
Commerce Secretary Carlos Gutierrez followed up on Monday, telling an audience in Beijing that "openness is at the core of the future of our relationship. Maintaining openness is not easy, but necessary."
In an apparent bid to address US concerns, the Chinese government said over the weekend that it would triple the stock market investment quota for foreign institutions to 30 billion dollars.
Essentially, the same promise was made in the previous Strategic Economic Dialogue in May and, even as it was reiterated, there still was no concrete timetable for when the expanded quota would be implemented.
"This is merely a more authoritative statement of the May consensus," said Zhang Gang, a Beijing-based analyst with Southwest Securities.
"If the issue were to come up again in the dialogue, it would look as if China was being pushed. To avoid that, China simply said it's just about to implement it."
A big team of senior US officials are accompanying Paulson on this trip, inclusing Gutierrez, Trade Representative Susan Schwab and Health Secretary Mike Leavitt.
But the Americans should expect only minimal Chinese concessions, at least this time around, said Nicholas Lardy, an expert at the Washington-based Peterson Institute for International Economics.
"The thinking of some people in China is 'well, we'll do as little as possible in the current administration and to the extent to which we can do something... we'll save it and do it after January 2009 when a new (US) administration may be breathing down our neck with greater intensity," he said.
The two-day Strategic Economic Dialogue begins on Wednesday.
Copyright © 2009 AFP. All rights reserved. More »
