SHANGHAI, May 15: The United States expects only limited gains in trade policy with China this year because of a busy Chinese political calendar, the US Treasury attache to Beijing said on Tuesday.
David Loevinger told a conference in Shanghai that the congress of the Chinese Communist Party this fall may not permit much progress on trade policy with China.
“Now is not the time for bold economic reform (for China), now is not the time to take on strong domestic vested interests,” he said.
“Because of a strong political calendar this may be the year that we may be less able to deliver, for us.” He added that the US side is under great pressure to deliver because it is itself under political pressure back home.
However, he said the US needs to be more sensitive to the public pressure it puts on China and that private discussions are more fruitful. Earlier this month, Treasury Secretary Henry Paulson played down expectations for any big breakthroughs in upcoming talks with China but said he was looking for possible short-term progress.
The US and China held the first “Strategic Economic Dialogue” in December in Beijing and the second round of talks is set for Washington on May 23 and 24.
Paulson will head the US team and China's delegation will be led by Vice Premier Wu Yi.
Loevinger said the exchange rate is still at the top of the agenda in talks with the Chinese leadership. He added that the US does not have a target for the appreciation of the yuan.
“We still think that the exchange rate is the linchpin to adjusting a lot of these macroeconomic imbalances,” Loevinger said. “Imbalances in the Chinese economy are large and rising.”
Meanwhile, China said on Tuesday it hopes next week's high-level trade talks with the US can help smooth out frictions between the two economic giants.
“In the process of development, it is quite natural for two countries to have some frictions. We hope the two sides can ... press ahead with healthy development of economic relations,” a foreign ministry spokeswoman Jiang Yu said.
The two sides will meet in Washington for the twice-yearly “Strategic Economic Dialogue” begun by Treasury Secretary Henry Paulson.
Vice-Premier Wu Yi, one of China's most powerful officials, will lead China's delegation, Jiang said.
The last meeting, in December, ended with little progress made in ironing out trade disputes ranging from restricted access to Chinese markets to US accusations that China keeps the value of its currency artificially low to boost exports.
Beijing pushed back somewhat at the December meeting, saying the US does not fully understand the economic and development challenges faced by China.
However, Jiang said China views the platform as vital to US relations, while declining comment on any specific positions China will take in the meeting.
