US urged to lift limit on high-tech exports

By Bao Daozu (Chinadaily.com.cn)
Updated: 2009-07-29 03:13

WASHINGTON: Chinese Vice-Premier Wang Qishan urged the US to lift its limit on high-tech exports to China and warned it against excessive issue of the dollar as the two sides discussed trade and investment in the second day of their Strategic and Economic Dialogue Tuesday.

“While we will try to expand imports from the US, we also hope the US loosen its limit on high-tech exports to China,” he said as he joined his US counterpart Treasury Secretary Timothy Geithner to open the second-day discussions on the Economic Track.

The US has blamed China’s “undervalued” yuan for its trade deficit with China, but ignored the fact it has many restraints on exports of high-tech products, which are much more expensive than common manufacturing goods, to China.

Full coverage: China-US Strategic and Economic Dialogue
Related readings: Vice FM: US should maintain stability of dollar China: US dollar to remain dominance for yrs Trade tops agenda of China-US dialogue China, US to hold sea consultations in July China, US move toward clean technology deal

Wang also said US should treat Chinese investors in the US “equally” and ensure the security of Chinese assets in the US.

As the US demanded that China rebalance its economy through increasing domestic consumption in the place of exports and investment, China urged the US to restrain from issuing the dollar excessively. Excessive issue of the dollar may lead to its depreciation, reduce value of Chinese investments denominated in the dollar, and trigger devastating inflation globally in the future, analysts said.

“As issuing country of the major global reserve currency, the US should deal with properly and balance dollar issue and its impact on the domestic and the international economy,” Wang said.

Wang also urged the US to recognize China’s market economy status and said the two sides should abide by the WTO rules and shun protectionism.

On rebalancing world economy, Wang said it is not an easy job as the transformation of economic structure involves such long-term factors as improving income distribution, health, education and pension reforms.

“The global economic imbalance … in essence is rooted in unbalanced development,” he said.

Geithner said that the US and China had reached common agreement on the need to work toward more balanced global growth once the current economic crisis has ended.

“Our two nations are committed to a strong and stable international financial system that will contribute to more stable, balanced growth globally,” he said.