WASHINGTON — Chinese Vice President Xi Jinping told business leaders and policy makers Wednesday that China has proposed a framework to the U.S. for promoting two-way trade and investment, while also defending steps Beijing has taken to address its trade imbalance with the U.S.
This story first appeared in the February 16, 2012 issue of WWD. Subscribe Today.
“Since the international financial crisis broke out, China has been taking measures to increase imports, especially imports from the U.S.,” Xi said in his only major policy address during his visit to the U.S., at a luncheon co-hosted by the U.S.-China Business Council and the National Committee on U.S.-China Relations.
Xi noted that U.S. exports to China have grown by 468 percent over the last 10 years and that China has become the fastest growing market for U.S. exports. He said trade between the two countries hit $446.6 billion in 2011 and is expected to top $500 billion this year.
China’s overall trade surplus with the U.S. has dropped from its precrisis level of over $300 billion to $150 billion, and its trade surplus to GDP ratio dropped from over 7 percent to 2 percent, Xi said.
“[We] moved to within a reasonable range by international standards,” Xi said. “The reform of the RMB exchange-rate formation mechanism has played an important role in this process.”
Many U.S. lawmakers and businesses have criticized China for undervaluing its currency by up to 40 percent, arguing it puts U.S. companies and their exports at a competitive disadvantage. Punitive legislation in Congress targeting China’s currency passed the Senate last year but stalled in the House after Republican leaders said it could run afoul of global trade rules and spark a trade war.
U.S. Commerce Secretary John Bryson, who spoke before Xi at the luncheon, said U.S. exports to China have grown by over 50 percent in the past two years, exceeding $100 billion for the first time in 2011. However, Bryson pointed out that the U.S. goods trade deficit with China also grew by about 30 percent.
Bryson said the U.S. and China can achieve a more balanced trade relationship “through expanded trade based on adherence to global rules and respect for intellectual property, on open investment in each other’s economies, and policies that support global innovation, fair competition and a sound balance between consumption and savings.”
“To be sure, we have our differences,” Bryson said. “But I believe we can find common ground and forge a future that will benefit China, America and the entire world.”