WASHINGTON – The Chinese are engaged in a multibillion-dollar buying spree of all things American, from soybeans to Boeing jetliners, and the huge U.S. trade deficit with China dropped unexpectedly in February.
The Bush administration said yesterday that more trade concessions will be needed when President Hu Jintao visits Washington next week to quiet growing unrest in the United States over a trade deficit with China that hit $202 billion last year.
That deficit, the highest ever for the United States with a single country, has led to demands in Congress for punitive tariffs against all Chinese products if Beijing does not do more to halt what critics see as the country's unfair trading practices.
The complaints include accusations that China has not done enough to deal with rampant piracy of copyright products. This practice robs American computer software companies and music and movie businesses of billions of dollars in annual sales.
American manufacturers also are upset because they believe China is unfairly depressing the value of its currency against the dollar by as much as 40 percent. Thus, Chinese goods bought by American consumers are significantly cheaper in the United States while American products are more expensive in China.
The trade deficit with China represented more than one-fourth of last year's record $723.6 billion U.S. deficit with all countries. Critics say the deficits are a major factor in the loss of nearly 3 million manufacturing jobs since President Bush took office in 2001.
Republicans, strong supporters of Bush's free-trade policies, are beginning to worry they could suffer in the upcoming congressional elections unless the trade picture begins to improve.
The Chinese, seeking to placate their biggest foreign market, dispatched Vice Premier Wu Yi and 200 Chinese business executives on a $16.2 billion buying spree over the past week with stops in a number of states to demonstrate the importance of the vast Chinese market for American companies.
The purchases included 80 Boeing jetliners and various other U.S. products, from telephones to soybeans to software.
Wu continued the goodwill campaign Tuesday during a stop in Washington, where she struck agreements to deal with some long-simmering trade disputes. She announced that China was ready to resume purchases of American beef that were halted after the first case of mad cow disease was discovered in Washington state in December 2003.
She made commitments to crack down on copyright piracy, including requiring all computers sold in China to be loaded with legal software.
The administration invited Wu to the White House yesterday for a meeting with Bush. The president told her that he was looking forward to next week's meetings and hoped the Chinese president would “explain to the American people how China will meet the challenge of rectifying global economic imbalances,” White House spokesman Scott McClellan told reporters.
The White House got some good news on America's deficit with China with a report yesterday showing the trade gap declined by a bigger-than-expected 22.7 percent in February, falling to $13.8 billion, the smallest imbalance with China since March 2005.
The improvement reflected a 19.9 percent jump in U.S. exports to China to $4.1 billion, the second-highest level on record, led by big gains in sales of American cotton, soybeans and semiconductors. Chinese imports fell by 16.2 percent to $17.9 billion.
