US seeks growth in China

The Bush Administration will seek to open the Chinese market for US exports and investments at a summit in Beijing, amid a souring atmosphere in the US Congress over China's trade and currency policies.

US Trade Representative Rob Portman and Commerce Secretary Carlos Gutierrez, who will travel to Beijing this week, will prod Vice-Premier Wu Yi to rescind draft regulations that could prevent companies such as Microsoft Corp from selling their software to the Government. They also want the Government to allow more US movies to be shown in China and for it to cut down on the pirating of movies and software.

Action on those measures could help dampen calls for protectionist measures in the US Congress, analysts say.

"The current political atmosphere is fraught with danger and unpredictability," said Erik Autor, international trade counsel at the Washington-based National Retail Federation, which represents Sears, Roebuck and Co; Liz Claiborne and other companies.

"Something needs to be done to make things less unpredictable, and we've told the Chinese as much."

China ran up a record US$162 billion ($240 billion) trade surplus with the US last year. It is on track to increase to US$220 billion this year, according to the National Association of Manufacturers.

US lawmakers, such as Democratic Representative John Dingell of Michigan, have called on the Bush Administration to file a complaint at the World Trade Organisation over China's peg of its currency, the yuan, at 8.3 to the dollar.

Dingell said his legislation, introduced on July 6, will pick up support because of unhappiness at the prospect of Chinese oil producer Cnooc purchasing Unocal.

Cnooc is offering US$18.5 billion, a 13 per cent premium to Chevron's US$16.2 billion offer.

Dingell's bill is one of at least a half-dozen pieces of legislation aimed at China, and that has trade negotiators worried that lawmakers might damage a commercial relationship that has helped the profits of large US companies and cut costs for American consumers.

- BLOOMBERG