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Sino-US Relations

Relations between China and the United States are at an unprecedented high, but certain issues need to be tackled to keep both nations' interests on the right track

"China has come a long, long way since I first visited on business in 1974," U.S. Ambassador to China, Clark T Randt, told members at a Chamber Distinguished Speakers Series luncheon on November 11. "Who would have thought that a mere 29 years after my first visit, Beijing would suffer from perpetual urban bumper-to-bumper gridlock; boast of a car-owning, cell phone-toting middle class; have two public stock exchanges; ...membership in the WTO; and successfully launch a man into space."

China's rapid development has earned itself a reputation as a responsible and integrated member of the global community, sharing vital strategic interests with the U.S. However, in other areas, Chinese positions and practices are not always on the same track as the U.S., especially issues of human rights, religious freedom, and trade.

"A major lynchpin of the United States-China relationship is our important, broad ranging and mutually beneficial bilateral economic and trade relationship," he said.

As the United States' fourth largest trading partner, total two-way trade between China and the U.S. reached US$147 billion dollars last year.  However, Congress has taken note of the United States' US$103 billion dollar bilateral trade deficit with China in 2002 and forecasts that this deficit amount will rise to $130 billion dollars this year.

"This growing imbalance has given rise in Washington to questions of basic fair play.  Has this one-sided trade result been achieved on a truly level playing field?  Or are American companies and workers competing in a rigged contest?" Ambassador Randt asked. 

As a result of such questions, Congress has recently introduced a number of bills, including a bill that would impose a 27.5 percent tariff on Chinese-made goods across the board and another that calls for the repeal of permanent normal trade relations with China.

"The Bush administration opposes these bills -- let me repeat -- we oppose these proposals.   However, these actions demonstrate the widespread conviction in the U.S. that the United States' trade with China is not free and fair trade," he said.

China joined the World Trade Organization in December 2001, agreeing to abide by its rules-based system that governs international trade in goods and services.  China is now finishing its second year of WTO membership and has made great progress in implementing its WTO accession commitments. For instance, China has amended or rescinded some 3,000 laws and regulations that were found not to be WTO compliant.

While the market access and lower tariffs promised under the WTO for Chinese goods imported into the United States have been delivered, the promised market access for U.S. goods and services in China has not been realized in a number of important areas, he said. These include trading, distribution and financial services, and in the continuing lack of transparency with respect to tariff rate quotas, in addition to agricultural trade.

Ambassador Randt also called on China to more vigorously protect intellectual property rights, and to move towards a floating, market-driven exchange rate mechanism.

"We have learned over the years that rigidities of all kinds tend to distort the proper functioning of markets," he said. "Open, competitive markets, with little or no interference, are needed to ensure that people and investment capital can seek out the best ideas and opportunities."

In addition to shared interests in globalization, trade and investment, the United States and China share common interests in and cooperate on a broad scope of critical issues, from counter terrorism to achieving a non-nuclear Korean peninsula; from energy to epidemiology. 

"China, like U.S., recognizes the vital national security and other interests of South Korea, Japan and Russia in this issue and in any comprehensive settlement," he said. 

The two nations also continue to cooperate closely on counter terrorism issues. In July, the U.S. signed an agreement on container security, allowing U.S. Customs inspectors to check containers bound for the United States in three Chinese ports, which account for 8 percent of the total container traffic arriving in the United States.

The U.S. is now encouraging bilateral exchanges with China based on a clear sense of national interest, reciprocity and transparency.

"China and its leaders clearly understand this. In the 21st century, China will inevitably exert a powerful influence in the Asia-Pacific region.  Size does matter.  Over 1.3 billion people cannot be ignored," Ambassador Randt said. "A China that is positively and responsibly engaged with the international community will make the world a safer and a more stable and prosperous place."