* China is the United States' largest creditor
* Obama, Republicans remain at odds in budget talks
* Leadership changes in China could pave way for reform
By Doug Palmer
WASHINGTON, Dec 16 The United States will press
senior Chinese officials this week for action on longstanding
trade problems, and may face a rebuke from Beijing over the
haphazard way it is managing its finances.
A Chinese delegation led by Vice Premier Wang Qishan will be
in Washington on Tuesday and Wednesday for talks with U.S. Trade
Representative Ron Kirk, acting U.S. Commerce Secretary Rebecca
Blank and U.S. Agriculture Secretary Tom Vilsack.
"I don't think we should be expecting sweeping changes, but
I do think we will see tangible progress on some specific
issues," said John Frisbie, president of the U.S.-China Business
Council. "China is definitely prioritizing its U.S. relations
and they are also discussing economic reforms back at home that
could impact some of the issues that matter to U.S. companies."
Kirk and his colleagues have said they are pushing China to
drop restrictions on U.S. livestock and farm products, to take
stronger action to stop counterfeiting and piracy of U.S. goods
and to reduce pressure on U.S. companies to transfer valuable
technology to do business in China.
Wang in turn is expected to convey Beijing's strong interest
in a deal in Washington to avoid the $600 billion in spending
cuts and tax hikes set to take hold at the start of the year,
widely known as the "fiscal cliff."
Economists warn that failure to avert that outcome could
send the United States back in recession, which would threaten
growth in China and around the world. President Barack Obama and
Republican leaders have so far made little visible progress
toward a deal.
Given that China is the United States' largest creditor, it
has a deep interest in Washington's management of its budget.
Chinese officials are also expected to press on a range of
other issues - from concerns about U.S. anti-dumping measures on
their exports, to restrictions on China's ability to import U.S.
high-technology products and the often strong political
resistance to Chinese investment in the United States.
The annual U.S.-China Joint Commission on Commerce and Trade
meeting comes during a transition for both governments.
Obama is expected to bring in a new economic team for his
second term. Chinese Vice President Xi Jinping took helm of the
Chinese Communist party in November and will take over as head
of state in March at the annual parliament meeting.
"We're either going to get nothing, meaning just details, or
we might get a change," said Derek Scissors, a senior research
fellow at the Heritage Foundation in Washington.
One reason to be optimistic that concrete progress could be
made is a trip Xi made last week to southern Guangdong, where he
echoed calls for market reforms and strengthening the rule of
law that reformist senior Chinese leader Deng Xiaoping made 20
years ago in the same province.
Outgoing Chinese President Hu Jintao's ten-year tenure is
generally associated with a retreat from market liberalization
and the rise of Chinese "state capitalism" that favored domestic
national champions over foreign firms.
In that sense, this week's JCCT meeting could mark the start
of the Xi era in U.S-China relations, but there remains a lot of
uncertainty about how much reform the new Chinese administration
will pursue, Frisbie said.
Wang is seen as a reform advocate and has been promoted to a
new senior Communist party position, but he also will be giving
up his responsibility for economic policies to head up an
Wang's sensitive new party position means he won't say much
that is bold, so "what I'm hoping is that he brings his
successor" even though one hasn't been named, Scissors said.
One U.S. business official, speaking on condition he not be
identified, said he was hoping for progress on troublesome
"indigenous innovation" policies that put pressure on U.S.
companies that want to do business in China to transfer
technology to Chinese partners.
U.S. companies are also increasingly concerned about Chinese
cyberattacks and other attempts to steal trade secrets, he said.