U.S., China Economic Talks Conclude After Trade Clash

Officials ended two days of talks by calling for calmer heads to avoid trade spats after disagreeing over who was responsible for Beijing's massive trade surplus.

XIANGHE, China (AP) — American and Chinese officials ended two days of economic talks Thursday by calling for calmer heads to avoid trade spats after clashing over who was responsible for Beijing's massive trade surplus.
''We've discussed the importance of balanced growth in both our nations,'' U.S. Treasury Secretary Henry Paulson said in his closing statement.
''We also both recognize the need to fight economic nationalism in our two nations,'' he said.
China's top negotiator, Vice Premier Wu Yi, called the China-U.S. Strategic Economic Dialogue, held in a resort outside Beijing, a ''complete success.'' She cited progress on food safety and environmental protection.
''Both sides need to discuss Sino-U.S. economic relations from a strategic point of view and map out a better blueprint for future U.S.-China economic trade relations and cooperation,'' Wu said.
Their comments came just hours after the U.S. Commerce Department said the U.S. trade deficit with China jumped 9.1 percent to $25.9 billion in October, a record for a single month.
The rise reflected record imports from China on the back of increased shipments of toys and games and televisions for Christmas. The demand is still strong despite a string of high-profile recalls of Chinese products from toys with lead paint to defective tires and tainted toothpaste.
So far this year, the U.S. trade imbalance with China is running at an annual rate of $256 billion, on track to surpass last year's record high for any country of $233 billion.
The deficits have triggered a backlash in the U.S. Congress, with dozens of bills introduced seeking to penalize China for what critics see as unfair trade practices contributing to the loss of 3 million U.S. manufacturing jobs since 2000.
U.S. Commerce Secretary Carlos Gutierrez cautioned against those moves, touting achievements in product safety, with agreements signed to safeguard some food and drug imports to the U.S., and another to make it easier for Chinese tourists to visit the United States.
''It's a tremendously complex relationship, and to think somehow that could be solved with a simple act of protectionist legislation I think is a mistake,'' he said.
But Paulson did push China to open its markets more to U.S. goods and services, while Wu said Beijing can't be blamed for enthusiastic U.S. consumer demand for inexpensive Chinese products and urged Washington to lift restrictions on high-tech exports.
Wu also bristled at any protectionist moves, warning they could be a double-edged sword.
Beijing officials also spoke out against criticism that China's currency, the yuan, is undervalued, giving it exports an unfair advantage and inflating the nation's trade surplus. China has allowed a slow rise in the yuan's value, but critics have said it was not enough.
Paulson reiterated calls for a faster yuan appreciation, saying it would help China deal more effectively with rising inflation and asset bubbles amid signs its economy was overheating.
But he said people were ''misinformed'' if they thought the trade imbalance could be significantly affected simply by a rise in the yuan's value.
China's trade surplus was ''created by the fact that our nation is growing and not saving and that China has an economy that is built around exports, investing heavily in export industries and has relatively low levels of domestic consumption and very high saving rates,'' Paulson said.
Fundamentally leveling that imbalance would ''take a little while,'' said Paulson, who met Chinese President Hu Jintao and Prime Minister Wen Jiabao on his return to Beijing.
Wen said environmental protection agreements, including one on developing biofuels, ''shows that our strategic dialogue can be productive.''
The next round of the Strategic Economic Dialogue was set for Washington in June.
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