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US Official Warns China of Growing Protectionist Sentiment


U.S. Secretary of Commerce Carlos Gutierrez has ended a trip to China with a warning to Beijing that protectionist sentiment is growing in the United States. Mr. Gutierrez has urged China to do more to help stem the trend.

Secretary Gutierrez suggested to a group of U.S. businesspeople here Wednesday that proposed U.S. laws threatening China are signs the United States is in danger of slipping into an era of protectionism.

He later told reporters such sentiments are harmful not only to the United States, but also to China and its growing - but in many ways still fragile - economy.

"We are China's number-one customer, and I recall that in my days in the business world, the thought of my number-one customer changing strategy or changing policies that would affect my sales was a major issue for us," he said. "So any time your number-one customer goes through a change as dramatic as would be going from an open market to a protected market, that would have a very significant impact on the Chinese economy and Chinese society."

Fueling the rise in protectionist thought is America's burgeoning $202 billion trade deficit with China. This is expected to be high on the agenda when Chinese President Hu Jintao visits Washington in mid-April.

Some U.S. politicians, manufacturers and labor unions blame the imbalance largely on China's currency policy. They accuse the Chinese of manipulating their currency, the yuan, to keep it undervalued - a practice politicians say makes Chinese products artificially cheap, and threatens U.S. jobs. China says a drastic revaluation could hurt its growth.

With the aim of pressuring the Chinese into allowing the yuan to float, two U.S. senators have proposed legislation to slap 27.5 percent tariffs on Chinese imports into the U.S. A vote on the legislation was supposed to take place this week, but after visiting China themselves last week, the Senators on Tuesday decided to postpone the vote until September.

Mr. Gutierrez said the Bush administration in general remains opposed to legislation that calls for sanctions against China.

"What we don't want is to convey contradictions and different points of view," he said. "However, we believe that the way to address issues, to address any conflicts that we may have with any of our trading partners, is through negotiation, is through dialogue, is through engagement, and not through legislation."

With President Hu's visit approaching, Mr. Gutierrez said the next few weeks provide an opportunity for the two countries to move their trade relationship to the next level.

He said he urged top Chinese officials to help fight the protectionist trend. While praising Beijing's efforts to fight intellectual piracy, he said it still needs to do more in this area. Washington says the illegal copying of U.S. products is another major factor in the trade imbalance.

He said Beijing is also not meeting its World Trade Organization commitments to open its market to U.S. products.