12/05/2008, 00.00
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Beijing and Washington make many commitments, take few decisions, wait for Obama

The two sides agree to inject US$ 20 billion in trade with developing countries. They slam protectionism and make joint statements of principle. Beijing hopes dialogue with the United States will continue, but experts wonder what Obama will do.
Beijing (AsiaNews/Agencies) – The United States and China will make US$ 20 billion available in trade financing to boost commerce and resist protectionism. The decision came at the end of a two-day meeting that tried to reassert the usefulness of biannual Sino-US Strategic Economic Dialogue; it did not however improve any prospects for immediate results, whilst all this is under the shadow of President-elect Barack Obama.

The money— billion provided by the US and US$ 8 billion by China—will help importers, especially in developing countries, who are strapped for cash to buy goods. However, it is essentially symbolic since the amount is relatively small and unlikely to make huge difference. It does none the less allow US Treasury Secretary Henry Paulson to say that “'We are both committed to strengthening the global economy.”

The two-day meeting in Beijing also saw the countries sides agree to statements of principle and secondary deals on trade as well as technological co-operation on energy and environmental conservation.

“Both sides believe that in the face of the growing challenges posed by the crisis we must fully oppose all forms of protectionism,” China’s Deputy Premier Wang Qishan said.

The mainland is very concerned that rich countries might adopt protectionist measures which would hit already declining Chinese exports.

Many experts note that the ‘dialogues’, which began in 2006 to smooth economic policies between the two countries, have had few concrete results, except as a way of exchanging views, this according to China’s People’s Daily.

Also the United States is not likely to be satisfied by China’s complaint that “important reasons for the US financial crisis include excessive consumption and high leverage,” as China's central bank governor, Zhou Xiaochuan, stated.

There is nothing new with regards to the yuan, which for the United States remains unfairly low and should appreciate; by contrast, Beijing has only accepted partial adjustments and won’t rule out “weakening” to favour greater foreign capital inflow.

Although some media are quoting official US sources saying that China has accepted to continue appreciating the yuan, “If there's no major change to the overall international economic environment, and if everybody continues to work together in a serious manner to deal with the ongoing financial crisis, I think we will still be able to keep [the yuan] stable,” Chinese Commerce Minister Chen Deming said. This said, such a scenario is not very likely since it depends so much on circumstances beyond China’s control.

President-elect Obama has yet to say whether he will continue the Sino-US economic dialogue, which is instead welcome by Beijing.

“We look forward to continuing this candid and pragmatic dialogue with a new administration in the United States,” Vice Premier Wang said, adding that “We firmly believe that tomorrow China and US relations will only be better.”

But there is something new. “Previously, one of the US priorities was to get access to China’s own financial market,” Paul Cavey, head of China economics at Macquarie Securities Ltd. in Hong Kong, told Bloomberg. Now it is the “US [that] needs more money, so it’s a change of tone."

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See also
China and US to pursue economic co-operation, resist protectionism
Beijing and Washington to jointly discuss economic policies
Prices keep rising even when inflation starts slowing down
Good will but few concrete results for the two countries
Washington calls on Beijing to take concrete steps on currency and trade


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