Secretary Locke Calls for Greater Equity in U.S.-China Trade

By Merle David Kellerhals Jr.
Staff Writer

Washington - Commerce Secretary Gary Locke called on the Chinese government to create a more equitable commercial relationship with the United States - one that will foster business and industrial growth for both nations and one that is befitting two major economies.

Locke said that he is seeking ways with his Chinese counterparts to unlock the full potential of the U.S.-China commercial relationship as a necessary component to further expand "perhaps the most important bilateral trading relationship in the world."

After Canada and Mexico, China is the third-highest destination for U.S. exports, and the United States is China's Number 1 national market for its exports. Locke said that in the past two decades U.S. exports to China have risen by a factor of 12, while imports from China have increased more than 30-fold.

"However, we are at a turning point in the U.S.-China economic partnership," Locke said in a speech ( http://www.america.gov/st/texttrans-english/2011/January/20110114131409su0.2648432.html ) at the U.S.-China Business Council in Washington on January 13. "Last year, China became the second-largest economy in the world."

"And the policies and practices that have shaped our relations over the past few decades will not suffice over the next few decades," Locke added.

New trade figures released by the Commerce Department January 13 indicate that the overall U.S. trade deficit declined a modest 0.3 percent, to $38.3 billion, in November 2010 as the demand for U.S. exports rose while the value of the U.S. dollar weakened. But the U.S. trade deficit with China rose during that month by 0.5 percent, to $25.6 billion, the Commerce Department said.

While China imported more U.S. goods and services in November than in the previous month, those gains were offset by rising U.S. demand for Chinese exports. Exports to China in November 2010 were $9.5 billion - the highest on record, according to government statistics - but imports were $35.1 billion for the month.

"The gross trade imbalances between our countries are a good place to start because they have the potential to threaten global stability and prosperity," Locke said. He said that China was able to build its economy by exporting to consumer-driven major economies, but that is changing, and China is beginning to realize that there are limits to export-driven growth.

The United States is moving to make global adjustments by increasing private savings and exports, and also beginning reductions in its long-term deficits to more workable and sustainable levels, he said. The Chinese leadership is making rebalancing the economy to reflect changing conditions part of its future planning, he said.

While the United States wants to enhance long-term trade and commercial business with China, it is essential that China make trade equitable, Locke said.

"China has benefited tremendously from this international trading system, especially since it joined the [World Trade Organization] in 2001," Locke said. "The United States and other foreign nations have every right to seek more meaningful commitment and progress from China in implementing the market-opening policies it agreed to when it joined the WTO."

The speech by Locke to business executives who foster commercial business and trade between the two major economies is part of a broader effort by the United States to strengthen and deepen its relations with China. Both nations are involved in efforts to provide more peace and stability for Northeast Asia and across East Asia.

In this week alone, Defense Secretary Robert Gates ( http://www.america.gov/st/peacesec-english/2011/January/20110111151632elrem0.8210413.html ) has visited China, Japan and South Korea; Treasury Secretary Timothy Geithner ( http://www.america.gov/st/texttrans-english/2011/January/20110112113449su0.3713299.html ) delivered a major address on January 12 on U.S.-China economic relations; Locke spoke on January 13; and Secretary of State Hillary Rodham Clinton ( http://www.america.gov/st/texttrans-english/2011/January/20110114133542su0.1029866.html ), coming off a diplomatic mission to the Gulf states region, gave a major foreign policy speech on U.S.-China relations on January 14.

President Obama will welcome China's president, Hu Jintao, to Washington January 19 for a formal state visit. During their meetings, the two world leaders will discuss a range of geopolitical security problems such as North Korea and Iran, the global economy and trade issues, and bilateral issues. China and the United States have developed strong ties over the last few decades despite some disputes, analysts say.

ENDS

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