Hu urges U.S. to take long view on trade

Kari Huus Reporter • Profile • E-mail

MUKILTEO, Wash. - Quoting poets from both sides of the Pacific, Chinese President Hu Jintao on Wednesday told an audience of several hundred business and government leaders that the way to maintain balance in U.S.-China relations is to take a strategic, long-term view.

In a sweeping luncheon address, Hu touched on many sources of bilateral tensions, including the United States’ yawning $202 billion trade deficit with China, Chinese piracy of intellectual property and alleged manipulation of Beijing’s currency.

But after summarizing China’s efforts to solve these problems, and urging the United States to do its part, Hu sought to calm growing unease in the United States over China’s economic and political ascent.

“Trade issues should not be politicized,” he emphatically told the crowd.

Hu was on friendly turf in Washington state, which is the only American state that actually runs a trade surplus with China, owing to exports by local companies, including Boeing, Microsoft and Starbucks, which has outlets burgeoning in Chinese cities, as well as agricultural exports.

Several hundred business and community leaders were on hand for Hu’s speech — at a cost of $750 a plate, and up — and to meet the Chinese VIPs traveling in his 100-strong delegation, who were dispersed among local guests. Most in attendance wore Western-style business suits, though a few American guests donned traditional Mandarin-style garb.

Hu, his wife, Liu Yongoing, and top Chinese officials shared the dais with key government figures from the state, as well as Microsoft Chairman Bill Gates and Alan R. Mulally, president and CEO of Boeing's commercial airline division.

Warm welcome for Kissinger
But the greatest applause from the VIPs and the audience went to former Secretary of State Henry Kissinger, who was greeted by Hu with a hug. Kissinger was instrumental in arranging former President Richard Nixon’s landmark 1972 trip to China, which paved the way for the re-establishment of bilateral ties.

In a speech that repeated the substance of his comments a day earlier to a local Chinese American group, Hu vowed to help reduce the trade imbalance with the United States by expanding domestic demand.

“China does not seek a large surplus,” Hu said, pointing out that the country runs a trade deficit with Japan, South Korea and a number of Southeast Asian countries. Still, he promised his country “will further open its markets to American goods and services.”

But he also urged he United States to “take steps to promote the export of U.S. products to China,” including easing of export controls — a likely reference to a self-imposed U.S. ban on high-technology items that have potential military applications.

And Hu rejected U.S. demands that China revalue its renminbi currency, also known as the yuan.

“Our goal is to keep the renminbi exchange rate basically stable at adaptive and equilibrium levels,” Hu said.

“China will continue to firmly promote financial reforms, improve the renminbi exchange rate-setting mechanism, develop the foreign exchange market and increase the flexibility of the renminbi exchange rate,” he said.

Revaluing the yuan is a key U.S. demand, which officials say is vital to make American exports more competitive, erase an advantage Chinese manufacturers currently enjoy and reduce China’s bilateral trade surplus, which last year reached $202 billion.

China sought to quell U.S. trade complaints before Hu’s visit by signing contracts worth $16.2 billion while Vice Premier Wu Yi visited the United States last week.

Hu also talked extensively about China’s energy needs, and efforts to conserve, as well as the need to address its deteriorating environment and the growing income gap between rural and urban areas, which is increasingly a source of unrest.

He had little to say on the domestic political front, aside from a passing mention that China intends to “improve democracy.”

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