Next week's Sino-US Strategic Economic Dialogue comes at a
critical time because the Bush administration is under increasing
pressure from the Democratic Party-controlled Congress to sort out
its trade disputes with China, a Chinese expert said yesterday.
"The Bush administration has been trying to ward off domestic
pressure on trade disputes with China. But it seems to have stopped
doing so recently in the face of mounting pressure from the
Congress and the American people," Shi Yinhong, director of the
Center for American Studies of the Renmin University of China,
said.
The heating up of the presidential campaign has added to the
pressure on Bush before the second round of the dialogue, scheduled
for May 22-23 in Washington.
The world has become so interdependent that it's natural for the
two big economies to have economic disputes, Shi said.
"The point is not about trying to find a problem-free economic
environment; it is about looking for a channel to divert these
disputes and clear our misunderstandings."
"Disputes can arise at any place, but the Strategic Economic
Dialogue, (along with dozens of other talks), provides such a
channel for officials and ordinary people in the US and China to
exchange views and make some compromises," he said.
Currency exchange rate, intellectual property rights and market
access to China are expected to be on top of the US agenda, Shi
said. But it's unrealistic to expect any breakthrough in these
areas.
No breakthrough, however, doesn't mean failure or that
high-level officials should not be present at such meetings.
It can be considered fruitful if they can make some progress in
those areas because even a small progress can relieve the pressure
on the Bush administration, he said.
China understands the pressure Bush is facing, and has done a
lot to help relieve it. But there's no reason for it to be blamed
for that, he said.
To go with the world's existing economic environment, China has
adopted a "managed floating exchange rate", and the yuan has
already appreciated 5.4 percent since 2005.
The yuan became more flexible recently and is expected to be
more fluctuating, said Zhao Xijun, a professor in the School of
Finance of Renmin University of China.
"The increase in federal reserves and trade surpluses and flow
of foreign capital into the Chinese stock market have increased the
pressure on the government to appreciate the yuan further," Zhao
said.
To solve the problem of the trade surplus, China has been
working to adjust its trade imbalance and currency rate both, he
said.
The complaints and demands of our trade partners such as the US
are often based on their own political or industrial
considerations, Zhao said.
Premier Wen Jiabao has made it clear China has already set the
course of its direction for the exchange rate reform, but it must
be based on China's domestic situation.
(China Daily May 16, 2007)