BEIJING, March 29 (UPI) -- America's Secretary of Commerce Carlos Gutierrez wrapped up a crucial trip to China Wednesday saying there was too much at risk letting political frictions ruin bilateral trade.
Secretary Gutierrez called Sino-U.S. trade ties "the most important economic relationship of the 21st century." The need for policy makers to strike a balance harmonizing China's economic rise while protecting American business interests in the geopolitical economy remains the greatest challenge facing statesmen in both countries today.
The crux of China and America's trade disputes centers on the notion of entitlement entwined with sorting out concomitant rights and responsibilities. Both sides like to stress the former and ignore the latter.
Americans see themselves entitled to having a major hand in crafting the rules of economic engagement as the world's richest nation. Historically every country in a position of predominant power tries to dictate the most favorable terms to maintain that status quo.
The Chinese perception of entitlement continues to be a thin-skinned victim mentality dating back over the last 150 years to when it was not an equal partner in creating trade regimes or the international political order. China sees itself entitled to a greater say in both forums.
It is hypersensitive to any criticism, from human rights to currency pegs, considered a smudge on its world stage face.
Gutierrez's visit was an intense effort at trade diplomacy to iron out some of the outstanding trade issues as Congress increasingly considers China a country that will not play by the rules of the game in global commerce.
At the same time, the Commerce secretary was in Beijing with the difficult task of telling senior Chinese officials about such concerns in the run up to PRC President Hu Jintao's state visit to the White House in April.
Capital Hill is growing restive. Senators deferred a vote on one bipartisan bill Tuesday (Graham-Schumer) aimed at China's restrictive currency policy while new legislation coming from both sides of the aisle (Grassley-Baucus) on the topic was introduced the same day.
At a breakfast for members of the American Chamber of Commerce and U.S. China Business Council in Beijing, Gutierrez outlined three issues "that dominate our discussions about trade. These were listed in order of priority: the size of the China-U.S. trade deficit; access to China's market; and the climate for intellectual property.
"The Bush administration believes that substantial progress on IPR and market access will reduce our present trade deficit," Gutierrez said.
"We believe China's senior leaders support our goal, however producing results across a central government of this size and the provincial and municipal levels remains a very, very large challenge," he added.
Gutierrez said "few emerging economies will have a larger influence than China over the global economy" this century. He noted "exports provide 40 percent of China's Gross Domestic Product and the U.S. market has made us China's number one customer."
The notion of customer leverage was a theme Gutierrez repeated several times to businessmen at the breakfast event, then with reporters at a roundtable immediately afterward.
The Cuban-born American spearheading U.S. commerce policy is no stranger when it comes to doing business. He joined cereal maker Kellogg at age 22 in 1975 and became the company's youngest CEO in 1999. Gutierrez spent his early adulthood living the successful corporate adage, "the customer is always right."
Gutierrez said the U.S. accounted for a larger part of China's economic growth during a time hundreds of millions of Chinese had been lifted from poverty. He noted America had also benefited from China trade stating exports grew by 20 percent in 2005 after 22 percent growth the year before.
"Although there is an enormous upside for companies doing business here, the reality of trade with China continues to fall short of the tremendous potential that this country has," Gutierrez
He said there was no avoiding the fact that the China trading relationship is "burdened by a $202 billion dollar trade deficit...we would like to see China lighten the load by continuing on the path of reform and delivering results on commitments."
The Commerce Secretary unleashed a barrage of complaints the bilateral relationship faces including barriers such as industrial policies and technical standards putting imports at a disadvantage "as they shelter and protect domestic industries."
Gutierrez cited the lack of transparency in Chinese regulatory systems and weak IPR law enforcement placing U.S. and other foreign companies at a disadvantage while local firms gaining advantage "through their government connections."
He also mentioned subsidies as another growing concern. "It's hard to judge the full scope of this problem because China still hasn't submitted to the WTO a complete list of all of the subsidies present in the economy, Gutierrez said.
"The bottom line is that our companies still don't have the access they were promised under the terms of China's WTO commitments he added."
Despite mounting dissatisfaction with the Bush Administration on many fronts, China is one area where the big picture is in focus amidst a rapidly evolving environment.
In Beijing on Wednesday Gutierrez said "China is not just one more trading partner; it is not just one more WTO member; the PRC is at a stage, a size and point of influence where it needs to graduate to being a responsible and very important stakeholder of the global trading community."
