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US, Chinese Summit Expected to Focus on Trade, Security Issues


The pending visit of Chinese President Hu Jintao to the United States is throwing the spotlight on the current state of relations between the two countries. Issues high on the agenda include trade and the nuclear ambitions of Iran and North Korea.

President Bush indicated what he expects from his meeting with his Chinese counterpart in comments he made Thursday to a group of American small business leaders.

"I am going to meet with President Hu Jintao, and I look forward to welcoming him to the White House," he said. "America values China as a trading partner, but we expect China to live up to its commitments."

President Bush urged China to strengthen protection of U.S. intellectual property rights. The pirating of computer programs, films and music is a thriving business in China, and U.S. companies say it costs them billions of dollars in lost sales each year. President Bush also pointed to the U.S. trade deficit with China, which has surpassed $200 billion.

"China needs to take additional steps to address the trade imbalance between our countries. And, China needs to move to a flexible, market-based currency," he said.

Chinese vice premier Wu Yi, who is now in the United States, heading a major Chinese trade delegation, acknowledged the trade imbalance, but said it is not solely China's fault.

"I think is is unscientific and unfair to ascribe the U.S. trade deficit issue to China, only," she said.

At the same time, though, she said, China is taking concrete steps to increase imports from the United States. These efforts included a multi-U.S.-city buying tour, during which the Chinese government signed contracts to purchase goods worth more than $16 billion.

Wu added that Beijing is taking further steps to improve U.S. intellectual property rights protection, including setting up reporting centers around China, and shutting down production lines that make pirated goods.

One issue the Chinese official did not talk about, though, was China's currency, which U.S. critics say is artificially undervalued and, therefore, gives China an unfair trade advantage.

Fred Bergsten, of the Institute for International Economics, said, if China does not allow its currency greater freedom, there could be protectionist backlashes in the United States and around the world.

"Continued financial misalignment of this type, could put a major dent in the global trading system, because of the reaction of our own Congress, European parliaments and governments, if it continues much longer," he said.

He added that, even if the Chinese president has nothing definite to announce about the currency, he hopes there will at least be some indication of Chinese movement on the issue.

This viewpoint was reinforced by Bates Gill, from the Center for Strategic and International Studies, a public policy organization. Gill said he believes Chinese economic promises may come in exchange for President Hu receiving what he described as the "proper respect and protocol" during his White House visit.

"He's [Hu] going to get a lot of that. I think, they [the Chinese] should be satisfied there," he said. "Probably, [they will] give a little bit on the trade questions, at least do some signaling about their intention to revalue their currency, and, through this massive buying spree here in the United States over the past two weeks, try to defuse a little bit of the rhetoric and threats on the U.S. side, on the question of economics and trade."

Gill added that he believes global security issues will also be on the U.S.-China agenda. The two at the top of the list are the nuclear ambitions of Iran and North Korea.

"I think, President Hu hopes to get out of town with some reassurance that China is still seen as part of the solution, not part of the problem," he added. "And that's going to require, on China's part, some stronger reassurance to the United States that they are supportive of our actions - not just to stabilize the North Korean situation, not just to stabilize the Iranian situation, but to move it ahead in a direction the United States wants to see."

Gill says he believes both sides are likely to come away from the summit generally satisfied and happy with the results. He adds that the issue of greater freedom and democratization in China may come up, but is likely to be, in his words, a distant third place to issues the United States is focused on - namely, trade and Chinese cooperation on global security issues.

For its part, he adds, China's main goal is to show its people back home that it has the White House's respect.

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