CHINA / National

Biz group paves way for Hu
By Joseph Kahn (The New York Times)
Updated: 2006-04-06 11:50

Chinese leaders, hoping to improve relations with the United States ahead of the first ever visit there by President Hu Jintao later this month, have dispatched a large delegation of businessmen and economic officials both to display China's buying power and to cool protectionist sentiment in Congress, officials said today.

The buying mission, the largest China has assembled since reestablishing diplomatic relations with the United States in late 1979, reflects Beijing's view that it may be easier for it to try to lower economic tensions than to satisfy some other American demands, such as doing more to help curtail nuclear programs in Iran and North Korea and reducing human rights abuses at home.

More than 100 business executives joined Wu Yi, China's vice premier and economic trouble-shooter, on an American tour that began Tuesday in Hawaii and is scheduled to cover 13 states.

The trip is expected to result in multibillion-dollar orders for Boeing aircraft, auto parts, computer software, telecommunications equipment, grain, cotton and soybeans and other products, officials and state media reports said.

A senior foreign ministry official described the latest mission as "very big," and noted that it included representatives from a wide range of state-owned and private businesses who do not typically travel with senior Chinese leaders.

"We do want to show the United States that trading ties are mutually beneficial and we hope people will take notice," said the senior foreign ministry official, who said he could speak with foreign reporters about the matter only if he were not identified by name.

"Our message is that common interests are on the increase and the basis of the bilateral relationship is being constantly strengthened," he said.

Mr. Hu will visit the United States from April 18-22, including his first trip to the White House since becoming China's Communist Party chief in 2002 and president in 2003. Chinese officials are eager to ensure a positive reception for Mr. Hu and to demonstrate that he can keep China's most delicate diplomatic relationship on an even keel.

China last year piled up a $200 billion dollar trade surplus with the United States, a record trade gap for Washington. The deficit has triggered Congressional proposals to impose tariffs on Chinese imports unless Beijing moves faster to raise the value of its currency, the yuan, which some critics say is kept artificially low, giving China's exports an unfair edge in international markets.

Bush administration officials have said for months that Chinese leaders were underestimating the surge of anti-China sentiment in Congress and among some influential interest groups. They have pressed Beijing to increase imports from the United States, allow the yuan to appreciate faster and do more to stop rampant violations of American copyrights and trademarks by Chinese companies and government entities.

China has ruled out any sudden shifts in its currency policy, insisting that it will move steadily, but gradually, toward a market-driven exchange rate.

Officials here have signaled a willingness to do more to protect intellectual property rights, a perennial sore point with American companies. They have publicized fines imposed on Chinese companies that use pirated software. They may also commit to purchases of American software for government computers.

The biggest action is on the trade front, with China expected to order at least 80 new Boeing aircraft, mostly single-aisle 737 models, state media reported. It could also commit to unprecedented purchases of agricultural commodities and cutting-edge telecom equipment needed to upgrade its fixed-line and mobile phone networks.

The foreign ministry official said the trade delegation, which also includes representatives of a dozen government ministries, is hoping to establish long-term ties with companies in the American heartland to promote imports in the future.

"We would like to emphasize that this is not a one-off," the official said.

The effort to ease trade tensions comes despite the fact that Chinese officials and some independent analysts argue that the current economic relationship, even with the large bilateral deficit, strongly favors the United States.

Chinese officials point out that China is now American's fourth largest export market, with United States exports to China expanding at a 21.5 percent annual pace since 2001.

Officials have also cited academic studies showing that if inexpensive goods from China were not available, American business and consumers would have had to pay up to $100 billion more for the same products made elsewhere. They also say that much of the profit from manufacturing in China goes to American and other foreign companies and patent holders who assemble goods and license technology in China.

"The general feeling here is that the trade deficit does not really come at the U.S. expense," said, an international relations expert at Beijing University. "The US makes money at every stage of Chinese production."

But, Mr. Jia added, China is eager to help Mr. Bush ease protectionist pressures in the United States and also create a more positive atmosphere for discussing more contentious political and diplomatic matters.

"Bush wants to strengthen relations with China but he is politically weak at the moment," Mr. Jia said. "For political reasons, we feel we need to help Bush."