THE Bush administration declared on Tuesday that the United States had entered a new phase in its economic relationship with China, and pledged rigorous enforcement of laws aimed at curbing what China critics see as unfair trade practices.
The pledge was contained in a 29-page administration review of America's economic relationship with China released four days after the government reported that the United States recorded a US$202bil (RM747) trade deficit with China last year. That's the highest ever recorded with a single country and up 25% from 2004.
US Trade Representative Rob Portman, whose office prepared the new review, said the administration intended to use all options available to address various problems with China.
Our US-China trade relationship lacks equity, durability and balance, Portman said. As a mature trading partner, China should be held accountable for its actions and required to live up to its responsibilities.
Portman announced the creation of a trade enforcement task force in his office that will be headed by a chief counsel for China trade, a new position.
Chu Mao-ming, a spokesman for the Chinese embassy in Washington, said he could not comment directly on the new report because he had not yet seen it.
But he said China did not want to politicise trade issues. We hope that trade relations between China and the United States will be conducted with the principles of development, equality and mutual benefit.
China was willing to work with the United States to seek a balance in their trade, but it would not help if political elements were embedded in the issue, a top Chinese legislator said on Tuesday.
Cheng Siwei, vice-chairman of the Standing Committee of the National People's Congress, said China and the United States should ease frictions in their trade ties and find a win-win solution through consultations.
We are equal partners and we should deal with the problem calmly. Don't politicise it, Cheng told a Sino-US trade forum.
Cheng's remarks came amidst the backdrop of rising pressure from US Congressmen on the Bush administration to find fault with China.
US senators Byron Dorgan and Lindsey Graham introduced legislation last week to repeal the normal trade relations status between the two countries.
The US Congress granted China permanent normal trade relations status in 2000, paving the way for its entry to the World Trade Organisation.
Another piece of legislation proposes to impose across-the-board tariffs of 27.5% on Chinese imports, unless Beijing revalues its currency.
Cheng admitted that China has a big trade surplus with the United States, but clarified that it was not the country's aim.
What we should bear in mind is that both sides reap benefits from trade cooperation, he said.
He quoted a study by US investment bank Morgan Stanley, estimating that US consumers had saved US$600bil (RM2.22tril) in the past decade by buying cheaper goods made in China.
China had also used a significant chunk of foreign exchange reserves, partly earnings from its trade surplus, to buy US bonds. At the end of last year, China held US$300bil (RM1.11tril) in US treasury bonds. AP / China Daily