The U.S. government's top trade negotiator is promising a tougher stance on trade with China. The Chinese government has repeatedly defended its trade record.
The report, presented by U.S. Trade Representative Rob Portman on Tuesday, says the United States has entered a new phase in its economic relationship with China. It promises Washington will put more pressure on Beijing to comply with global free trade rules.
The release of the report came four days after the U.S. reported a record $200 billion trade deficit with China in 2005, the highest ever recorded with a single country.
The report describes the U.S.-China trade relationship as unbalanced. It expresses concerns about China's enforcement of intellectual property rights and the country's failure thus far to honor all the market-opening commitments it made when it joined the World Trade Organization in 2001.
Portman announced the establishment of a special China enforcement task office in Washington. He said he also wants to have a U.S. trade negotiator based in Beijing and to improve coordination of trade policy with other countries.
The Chinese government did not directly comment on the report. But officials have recently defended their country's trade record by saying its cheap goods had saved American consumers hundreds of billions of dollars.
David O'Rear, chief economist of Hong Kong's General Chamber of Commerce, shares this view.
"There are 30 times as many people in America consuming products as there are manufacturing them. So, the overwhelming benefit is to the American consumer and any effort to restrict imports from China goes directly into the American consumer's pocket book and it takes a piece of their savings or money available for spending away," he said.
Thousands of Hong Kong companies are involved in producing consumer goods in China and exporting them to the rest of the world. In addition, many U.S. companies have offices here that handle business deals throughout China, so the issue of trade is vital to the city's interests.
O'Rear also says that 60 percent of China's exports come from companies with foreign ownership - many of them from the United States.
He says that while China usually does not react well to foreign pressure, it will be in its own interest to gradually move forward on issues such as intellectual property rights.
He predicts that with the Beijing Olympics coming up in 2008, China will pay more attention to the problem. That is because counterfeiting of items with the Olympics logo will cut into sales of legitimate Olympic goods, which Beijing needs to finance the games.