left corner left corner
China Daily Website

Fiscal cliff looms large over Sino-US trade talks

Updated: 2012-12-19 02:49
By Chen Weihua in Washington and Li Jiabao, Li Xiaokun in Beijing ( China Daily)

First high-level meeting between China and US since November

The first high-level talks between Chinese and US officials since both countries underwent leadership transitions in November will be held in Washington. Trade disputes and the US fiscal cliff are expected to top the agenda.

Experts are looking for a tone that indicates growing cooperation between the world's two largest economies even if detailed policies are not hammered out.

Vice-Premier Wang Qishan left Beijing on Tuesday afternoon for the 23rd China-US Joint Commission on Commerce and Trade scheduled for Dec 18 and 19 in Washington.

He will co-chair the annual talks with US Deputy Secretary of Commerce Rebecca Blank and trade representative Ron Kirk.

Kirk and his colleagues have said they are pushing China to drop restrictions on US livestock and farm products and beef up anti-piracy efforts, among other issues.

Wang in turn is expected to talk about Beijing's views on whether the US economy can avoid going over the fiscal cliff.

A deal must be reached in the US by Jan 1 or else $600 billion in spending cuts and tax hikes will automatically kick in. This is widely known as the fiscal cliff.

Given that China is the largest creditor of the US, it has

an interest in Washington's budget management. Economists warn that going over the cliff could send the US back into recession.

Other topics China may touch upon range from US anti-dumping measures on Chinese goods to obstacles in the way of Chinese investment entering the US, and restrictions on US high-tech products exported to China.

Shen Danyang, a spokesman for the Ministry of Commerce, said at a news briefing on Tuesday that despite the fast growth of Chinese investments in the US, some investors faced obstacles such as national security investigations.

"We constantly oppose the so-called 'national security' moves to block Chinese investments because it's obvious discrimination," Shen said.

"We hope that the US will judge Chinese investments fairly, avoid politicizing the issue and ensure transparency. The two-way investment pact should also be advanced to boost the confidence of Chinese investors," he said.

The first 11 months saw Chinese non-financial investment in the US total $1.1 billion, up 13 percent from a year earlier, according to the ministry.

China's non-financial outbound investment in the US registered $1.81 billion in 2011, up 38.5 percent year-on-year.

"In addition to Chinese investments in the US, China will also expect the US to take effective measures in export controls, trade cases against China and intellectual property protection," Shen said.

He Weiwen, co-director of the China-US-EU Study Center at the China Association of International Trade, said that the talks will help the US better understand China's signals on continuing reforms and opening-up, as well as welcoming US investment.

During a trip to southern Guangdong last week, Party chief Xi Jinping echoed calls made by late leader Deng Xiaoping on market reforms and strengthening the rule of law.

Huo Jianguo, president of the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, said that this year's talks will play a key role in ties. "Easing obstacles to Chinese investment in the US will be an important issue in this year's talks,'' Huo said.

"It will enhance trust and create a positive atmosphere for cooperation," Huo said.

"The key for Sino-US economic ties is long-term strategic trust."

Derek Scissors, a senior research fellow at the Heritage Foundation in Washington, told Reuters that "we're either going to get nothing, meaning just details, or we might get a change".

Previous Page 1 2 Next Page